Commercial general liability (CGL) insurance protects your business against claims for bodily or personal injuries, advertising liability, as well as property damage to third parties arising from your operations or products or occurring on company premises. While some policies may also cover environmental losses, there are a few reasons why business owners should consider additional environmental insurance.

Environmental Crisis

One reason to invest in environmental insurance is environmental crisis. According to an article by a fellow Insurance Manager, Marc Lebrun, “A crisis that is managed poorly can result in serious reputational and financial damage to a business. In some cases, if public confidence is diminished severely enough, it may even threaten the ability of the business to continue operations.”

Business owners with OTC’s Fixed Site Pollution Insurance may have coverage for pollution conditions arising at, on, upon, or migrating from their owned/leased location. 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.

Each location is individually underwritten to make a determination as to the extent of coverage that can be offered. For example, a clean site without a history of adverse operations or pollution conditions and where relatively benign operations are now being performed, can typically purchase broad coverage to include First Party Onsite Cleanup, Third Party Bodily Injury/Property Damage, and Offsite Cleanup for both new and pre-existing conditions (no retroactive date). However, often there are circumstances at a location that may require customizing coverage by establishing a retroactive date, providing coverage only for conditions that arise and are reported after this date and within the policy period. Additionally, policies can be tailored to fit very specific needs, such as limiting coverage to just onsite cleanup, or offsite Bodily Injury. It is this flexibility that makes these policies very powerful risk management tools. Most coverage forms are fairly flexible and coverage is always Claims Made.

Civil damage

Another reason a business owner may want to invest in environmental insurance is to protect themselves against civil environmental risks posed by their business. As Lebrun states, “The list of environmental legislation in Canada is lengthy. The federal government has imposed the Canadian Environmental Protection Act along with the Fisheries Act and Transportation of Dangerous Goods Act. The provinces and territories each have their own environmental protection and clean water statutes. Even some municipalities have had environmental regulatory powers delegated to them. Businesses that fail to comply with this profusion of regulations may be hit with fines and penalties from each level of government.”

Site Pollution, Environmental Impairment Liability, Premises Pollution, Pollution Legal Liability are all Claims Made policies which provide an insured with the same basic coverage for pollution conditions arising at, on, upon, or migrating from their owned/leased location.

Coverage is triggered either by a claim for damages from a third party, or by the discovery of contamination above “Action Levels” on the insured’s premises. “Action Levels” levels are set in every community on a federal, state, or local level. They represent the allowable concentration of any contaminant for the area in which the contaminant is discovered. Policies clean up pollutants to the acceptable level dictated by the governing authority. In other words, if you have pristine land on which you spill diesel fuel, you will need to clean up the site to whatever level is allowable by the governing authority.

Learn About Fixed Site Pollution Insurance or get started with a quote at https://www.otcinsurance.ca/fixedsitepollution