If you own a property or a business that has a possible pollution risk, you need to make sure you have insurance protection against liability. Even if you think you're insured, depending on your current policy, the cost of cleaning up petroleum spills, oil or other contaminants may not be covered. If you are susceptible to pollution, you may want to look into separate pollution coverage.

In a recent interview with Canadian Underwriter, Christine Nauth, assistant vice president for Strategic Underwriting Managers Inc., cited two examples in the construction industry. In one, a contractor was operating a piece of heavy equipment when the vehicle ran over a sharp object that punctured its fuel tank. As a result, fuel spilled,

“Although the machine was a motorized wheeled vehicle, it was unlicensed equipment and therefore not considered an automobile under provincial law. The heavy equipment was not covered under an auto policy."

In another example, "a contractor was working on a high-rise condo building, which was at the concrete forming stage. Oil for the tools and equipment was stored onsite in a barrel. During the night, high winds knocked the barrel over and the oil spilled on the street and cars below.” 

Insurance policies regarding pollution became more restrictive in the mid-1980s and inconsistency remains when it comes to coverage. At OTC Insurance we offer a variety of pollution coverage options, including Contractors Pollution Liability (CPL) Insurance and Fixed Site Pollution Insurance.

CPL policies provide contractor-based insurance for third-party coverage for bodily injury, property damage, defense, and cleanup as a result of sudden and gradual pollution incidents arising from contracting operations performed by or on behalf of the contractor. It is intended to provide coverage to all types of contracting operations, including contractors who are involved in building construction and environmental firms that remediate polluted sites.

Contractors should keep in mind that CPL insurance policies differ in regard to the types of pollution incidents that are covered. Two important considerations when evaluating CPL insurance policies are:

• Whether or not the policy will respond to gradual releases of pollutants, as opposed to sudden and accidental releases; and
• The types of substances that are considered “pollutants” under the terms of the policy.

Fixed Site Pollution Insurance provides the same basic coverage for pollution conditions arising at, on, upon, or migrating from their owned/leased location. Each location is individually underwritten to make a determination as to the extent of coverage that can be offered. Although there are many situations that warrant this type of coverage, here are the most common scenarios that drive interest:

• An insured’s desire to protect himself/herself against liability from third parties.
• Operations performed at the site prior to and during ownership.
• To meet contractual requirements for a property transfer, new construction, or refinancing.

Regardless of specialty, all contractors, property owners and business owners should be mindful of the pollution risks associated with their work. A CPL insurance policy can provide much-needed security in the event of a pollution incident, even in the most unlikely of circumstances.

CPL insurance is not only good for business, but it also provides peace of mind in industries that are full of surprises and risks. Let OTC Insurance Brokers work with your organization to find the CPL coverage that is right for you. Contact us to start a quote.