Monday, November 21, 2016

Why Your Business May Need Pollution Coverage

ALMOST ALL businesses have some risk of being sued or cited for pollution, even the most benign, such as a property owner. Pollution exposures for many businesses are obvious – like dry cleaners from the chemicals they use, to printing companies from the ink they use. And any manufacturer would face some type of pollution exposure as well, in addition to warehouse operators and contractors. Think you’re not exposed? Say you own a business property, even an office building for example, you could have pollution exposure such as:
• The existence of lead (paint and pipes) or asbestos.
• Releases of pollutants by tenants from improper or inadequate storage or disposal of lubricant oils, primer or lab waste material.
• Inadequate containment in loading areas that could lead to the release of pollutants.
However, as the risks have grown for pollution liability, most commercial general liability policies now exclude pollution coverage. It’s something to be aware of for most any business, particularly as the list of what is considered to be a pollutant has grown dramatically.

The exclusion
The easiest way to think of a pollution exclusion is that it can apply to a contaminant. Virtually every commercial general liability policy includes a pollution exclusion. These policies used to cover pollution but as the risk for being sued for pollution has grown, so then has the exclusion. The standard policy has two pollution liability coverage forms. It also has a special form for underground storage tanks. The current version of the Insurance Services Offi ce (ISO) commercial general liability form has pollution coverage narrowed down to a few covered occurrences, typically including:
• Certain off-premises exposures
• Certain product-completed operations
• Smoke, fumes, soot, vapors from your heating equipment or from a fire in your building
• Gas or fumes from materials you bring into a work site.

The solution
What are the possible answers when it comes to the pollution insurance question? You can have a specific commercial liability form or a separate pollution liability policy. Pollution liability insurance is designed to address claims and suits involving pollution losses in which it is alleged that the insured is responsible, as well as property losses related to pollution on owned or occupied property. 

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