Contractors Pollution Liability Insurance and Things Your Policy Must Cover

Just because you have contractor's liability insurance, don't make the assumption that it covers environmental incidents. Indeed, you may be surprised to learn that many policies actually exclude environmental pollution incidents.

Whether you are a contractor or subcontractor, get your liability insurance policy out and take a read. If it doesn't cover pollution then you need to get on to your insurance agent promptly to arrange cover.

A contactor's pollution liability policy needs to cover several essential things. One of these is what is termed emergency response cover. Pollution incidents generally happen without any prior warning; one minute everything appears fine the next a pollution issues has arisen. Additionally, a pollution incident may occur over a prolonged period of time, but no one has noticed. This means that by the time the pollution incident is discovered the matter could be very serious. So when considering a contractor's liability policy you need to look to check it specifically states that cover includes sudden and gradual pollution incidents.

It is also essential that your contractor's pollution liability policy provides legal assistance for those in the company held responsible. If you had to attend a court case relating to an pollution incident the costs could be substantial. Additionally, pollution cases can go one for many months, if not years. The policy needs to protect you up to high limits.

The policy must extend to third party liability. You may be potentially liable for bodily injury and property damage, irrespective of whether it was caused directly or indirectly by you or a subcontractor.

Check that the policy isn't only for a work site. Pollution incidents are more likely to occur while items are being moved around. This is particularly the case with loading and unloading. Also check that your policy is not site specific. For example; your policy may state that it covers one particular address when in fact you operate from several places. The details need to be clearly documented.

Check that you policy doesn't have duration limitations. For example, an incident may be discovered two or three years after your policy has expired. However, the date of occurrence was during the policy period. Some contractor's pollution liability insurance policies include indemnity limitation clause. This means that there will be a date where the insurer no longer provides cover, even if the incident occurred during the policy period. If you are unsure, check with your agent; this is very important because there is many times where it can take several years for a pollution incident become obvious. If it is subsequently proved that the pollution incident was down to you, and are not covered, then you become liable. You will generally find that the term used is called continuous cover.

It's also wise to check your policy includes acts of terrorism. You will find that some insurance policies specifically exclude this. If you operate overseas it's also essential that the policy states cover is worldwide.

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John Markus writes extensively on pollution and environmental issues - he frequently cites http://www.b-h-a.com (Beacon Hill Associates) and their packaged insurance policies for contractors (more information is available at http://www.b-h-a.com/packaged-coverages-contractors-consultants

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