Pollution insurance—Why it's so important for contractors | lareau English
Charles-Antoine Carra, CPA, CMA

Pollution insurance—Why it's so important for contractors

Environmental consciousness was not always an important issue as it is today. Similarly, purchasing pollution liability insurance has yet to become a priority for companies. However, this will change.

Do you know why repair garages are always located near rivers in the countryside? Because old engine oil was disposed of in the water. Seems incredible, right? Yet, it’s true. It sounds surreal because we are more attuned to the environment and have a deeper overall understanding of issues surrounding it. With this awareness comes the need for this particular type of insurance, which is still widely forgotten: pollution insurance.

Brian Cane, V-P of ENCON Group, has already written an article on the importance for contractors to purchase pollution insurance. I have summarized for you the main points and his top five reasons for having this specific type of insurance.

1- Pollution Exclusion in a Commercial General Liability Insurance Policy

Commercial General Liability insurance could very well exclude the main pollution risks to which you are exposed. For example, a machinery repair shop that spills a barrel of waste oil or a chemical waste tank that leaks.

2- Limited Pollution Coverage

Although pollution is covered under the insurance contract, coverage is limited, often to 120 hours following the event. However, its effects are not always discovered at the time of the event and it is only when it is that the damage becomes evident and the costs skyrocket.

3- Asbestos and Fungi Exclusions

We can decide to become a self-proclaimed renovator or we can get it done professionally—the results will vary tremendously. Nonetheless, when it comes to asbestos and fungi, the consequence is always the same—a contractor or an individual who takes down a ceiling containing asbestos will be exposed to contamination. No policy, whether it be that of the contractor’s or the individual’s, will cover damages caused by the contamination of asbestos dust.

4- Excavation and Risks Resulting From Excavation Work

The excavator does not always know what lies beneath the ground and it is often what the surface doesn’t reveal that can cause problems. It is possible for the excavator to damage an oil line by piercing the pipe or by backfilling and compacting too much material on top of a line. Because the nature of his work, an excavator is more at risk of causing environmental damage.

5- Punitive or exemplary damages

These damages, which are awarded against a contractor, are generally not covered under a liability insurance contract.

There you have it; the five reasons a contractor (and several other companies) should purchase a pollution liability insurance. Contact us today for a quote.

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Charles-Antoine Carra, CPA, CMA Personal-Lines Director See the profile

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