At first glance, your company may not appear to be at risk for the pollution liability exposures facing the heavy manufacturing sector. However, pollution liability coverages also address common exposures that you might face.
Are you adequately protected?
Does your business have all the insurance protection it needs—or does it even have all the coverage you assume is in place? Here are some examples of pollution claims:
- Carbon monoxide escapes from a restaurant’s heating, ventilating or air conditioning system causing illness and dizziness among patrons.
- A fuel line on a contractor’s air compressor suddenly ruptures, discharging fluid, which scars a recently resurfaced parking lot.
- A cleaning compound is inadvertently deposited down the drain of a day care centre, causing fumes, which makes some children ill.
- A private country club dumps herbicides in an abandoned well, causing groundwater contamination.
- An off-site service person ruptures a chemical hose, resulting in extensive premise damage.
- All of these incidents occurred and none were determined to be covered under the applicable commercial general liability policy.
Review your coverage
Every business should review these exposures since coverage varies among types of commercial policies and court interpretations.
Furthermore, individual insurance companies vary with how their policies address the issue, and there are even differences among company claims adjusters, managers and executives in their applications of pollution exclusion clauses.
It is also important to be certain your primary liability policy endorsements track with your umbrella policy so there are no coverage gaps. We recommend careful analysis on a case-by-case basis to avoid any surprises concerning coverage.
One popular solution to gaps in coverage is to obtain additional, specific coverage for on- and off-premise pollution liability or for on-premise pollution liability alone. An alternative may be to add an endorsement, which provides limited pollution coverage to existing policies.
By gaining a better understanding of pollution and product liability and the extent of your policy exclusions, you could avoid unexpected financial loss.
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