An environmental contractor involved in the abatement or removal of hazardous materials faces unique challenges, including employee exposures, third-party injuries and pollution-related property damage, to name just a few. What’s more, most commercial general liability policies don’t cover these types of incidents as they exclude coverage for pollution events. As a rule, workers’ compensation will cover employee illness and injury subsequent to toxic exposures. But the contractor may face additional liability if the injured worker or workers allege willful misconduct or extreme negligence. For these reasons, an environmental contractor needs specialized coverage to indemnify them against specific risks.
According to the International Risk Management Institute, there are presently no industry standards for environmental impairment or pollution liability coverage. In fact, there are over 100 different forms of available, and coverage can vary a great deal. That’s why it’s so important for any environmental contractor to seek out qualified advice from an insurance expert with knowledge in this specialized field. At the same time, they should also be aware of the exposures they face and choose coverage that’s well-suited to their needs. These will most likely include the following.
Worker’s Compensation Insurance
An environmental contractor’s employees face the same risks as all construction workers, such as slips and falls, injuries caused by falling objects, motor vehicle accidents and the like. Additionally, they face accidental exposure to known and unknown hazards, such as asbestos, solvents, respirable crystalline silica, and PCBs, all of which can have serious, long-term health effects. Exposure to molds, bacteria and other microorganisms can also lead to long or short-term disability and, in some cases, death. For this reason, even if they are doing business in a state that doesn’t mandate coverage, an environmental contractor should have adequate workers’ compensation insurance in place.
Contractors Environmental Liability
Contractors environmental liability insurance offers coverage for third-party injuries and property damage as well as first-party clean-up costs due to a covered event. For example, the accidental discharge of asbestos during an asbestos-abatement project could result in contamination of the job site, potential third-party exposures, and additional clean-up costs. An appropriate environmental liability policy would indemnify the contractor and pay any defense costs arising from a lawsuit.
An environmental contractor may be responsible for planning and implementing various phases of a clean-up project, including making recommendations to the client and subcontractors about how to proceed. Should these recommendations result in a pollution incident, the contractor could be liable for any damages caused, whether or not they performed the work. Thus, environmental contractors should consider a professional liability policy (without a pollution exclusion) to protect their assets in the event of a third party lawsuit.
Environmental liability insurance is complex and confusing, but we at Carmoon Ltd. are experts in the field. So why not let us design a comprehensive insurance program specific to your company’s needs? Just give us a call to set up an appointment for your insurance review. Or reach out online and we’ll get back to you right away.