CPL INSURANCE
Contractors Pollution Liability Insurance
Contractors , no matter what industry they work in , face environmental risks stemming from operations on a daily basis . For most contractors , a single pollution incident or loss can seriously damage their reputation , operations and even their balance sheet . Making matters worse , pollution incidents can be sudden or occur gradually over time .
While many contractors assume that environmental claims will be covered under their commercial general liability ( CGL ) policy , the unfortunate reality is that most CGLs contain pollution exclusions that leave contractors uninsured in the event of a pollution incident .
Thankfully , contractors are increasingly turning to contractors ’ pollution liability ( CPL ) insurance to ensure they have the right coverage in place to remain secure and profitable .
CPL COVERAGE BASICS CPL policies provide contractor-based insurance for third-party coverage for bodily injury , property damage , defense , and cleanup as a result of sudden or gradual pollution incidents arising from contracting operations performed by or on behalf of the contractor . CPL insurance 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 .
CPL policies are offered on either a claimsmade or occurrence basis . What ’ s more , CPL policies are nonstandard , meaning each policy is different and can be modified to cover the various needs of the contractor purchasing the policy . Policies can be offered on a project or blanket program basis .
In some instances , CPL policies can also be used to cover losses from civil fines , penalties and punitive damages .
COVERED POLLUTION INCIDENTS 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 .
• The types of substances that are considered “ pollutants ” under the terms of the policy .
Generally , policies that cover both gradual and sudden releases of pollutants provide contractors with a broader scope of coverage . In addition , policies that provide a broad definition of pollutants are considered superior to those that contain a narrow definition . Accordingly , it is important that contractors work with their broker to find a CPL policy that is tailored to their needs .
CGL POLLUTION EXCLUSIONS A primary reason why contractors obtain a CPL policy is due to the various pollution exclusions contained in most CGL policies . The pollution exclusions found in most CGL policies take one of two forms , either “ absolute ” or “ total .”
CGL policies with an absolute pollution exclusion remove coverage for most pollution events that would occur in the course of an insured ’ s business operations . However , despite its name , an absolute pollution exclusion may preserve coverage for certain incidental pollution damages , products and completed operations liability , and certain off-premises work .
However , more commonly , CGL policies include a more restrictive “ total pollution exclusion .” This type of exclusion effectively removes coverage for any event the insurer characterizes as a pollution incident .
CONTRACTUAL REQUIREMENTS Contractual requirements serve as another motivating factor that lead many contractors to obtain a CPL policy . In many instances , project owners and general contractors will require contractors to obtain pollution insurance that meets certain , predetermined standards .
From this perspective , having a CPL insurance policy in place can serve as an upfront sales tool during the bidding process that enables contractors to qualify for opportunities when such coverage is required .
FINDING THE RIGHT POLICY Regardless of specialty , all contractors 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 .
Let Bowen Miclette & Britt work with your organization to find the CPL coverage that is right for you . +
Provided by Bowen Miclette & Britt . This Coverage Insights is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice . Readers should contact legal counsel or an insurance professional for appropriate advice . © 2017 Zywave , Inc . All rights reserved .
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