Pollution Liability insurance is a type of coverage created specifically to manage the costs associated with pollution clean-up, as well as to cover liability claims for pollution-related injuries, illnesses or deaths. This type of commercial insurance was created in response to the problem that liability claims were bankrupting companies, and therefore victims were not being compensated.
Pollution Liability insurance will provide you with coverage for any type of small-scale pollution that causes contamination of soil, groundwater or property. It can also provide coverage for air-borne contaminates like smoke and emissions. Many policies will even cover pollution that occurred in the past before the harmful effects of waste-products was known. For larger, more extensive pollution incidents, an Environmental Impact Liability insurance policy may be needed.
Most of the coverage options listed below come standard with a pollution liability insurance policy, but some companies may require you to purchase additional endorsements to get full coverage. You can expect pollution liability insurance to cover:
Legal Defense Fees: Pollution insurance companies will provide your company with attorneys who specialize in these matters to defend you in a pollution-related lawsuit. Your policy can also cover the costs of any other related legal fees and court costs.
- Clean-Up Efforts: If your company is required by law to clean up contaminants, this coverage will compensate you for a portion of the costs. Many insurers will allow you to buy stop-loss policies that limit the amount that your company will be responsible for during the clean-up. This is beneficial if additional pollutants are identified in the clean-up process, potentially escalating the costs.
- Operations: If your business uses chemicals or hazardous materials in the course of its operations, you will want to be sure to have coverage for accidents or oversights that may cause pollution. There are two types of coverage available:
- Catastrophic Coverage: This covers you if there is a sudden, pollution-inducing event such as a fire or explosion.
- Non-Catastrophic Coverage: This covers you if pollution occurs over a long period of time and affects neighboring businesses or residents.
- Property Transfer: This protects property owners if they purchase a parcel of land or a building that was contaminated or otherwise polluted by a previous owner. If you have this insurance coverage, your insurer will cover necessary clean-up costs.
- Errors and Omissions: This coverage is specifically designed for clean-up companies and environmental consultants. It covers them for liability if they should wrongly declare a property free of pollutants or if the work they do causes further contamination