Resources & Insights

Why General Contractors Need Pollution Liability Insurance  

May 21, 2020

Scott Carlson,
President, Construction Practice

The Environmental Protection Agency recently relaxed enforcement of pollution regulations because, it says, some industries, including construction, may have trouble staying in compliance while they are short-staffed during the coronavirus pandemic.

While companies are normally required to report when they discharge pollutants into the water or air, here’s what the new policy says:

“In general, the E.P.A. does not expect to seek penalties for violations of routine compliance monitoring, integrity testing, sampling, laboratory analysis, training, and reporting or certification obligations in situations where the E.P.A. agrees that Covid-19 was the cause of the noncompliance and the entity provides supporting documentation to the E.P.A. upon request.”

That’s no doubt welcome news to many, a bit of relief in the virus storm. But the more cautious-minded among us point out what should be obvious: just because federal regulators are easing off on enforcement doesn’t mean all of the watchdogs are suddenly going to heel.

We’ve seen a flood of lawsuits by environmental groups, oftentimes joined by state governments, against the EPA, the Interior Department and, of course, industry in the past few years. There’s no reason to think any of that will slow down anytime soon, COVID-19 or not.

Contractors, we know, can face daunting liability from environmental claims due to the nature of their work.

Worse yet, contractors who rely solely on their General Liability policies to protect them can end up with crippling losses, because those policies often contain pollution exclusions. Fortunately, there’s Contractors Pollution Liability coverage to fill the void.

These policies provide coverage for liability due to pollution arising from operations performed by or on behalf of the contractor at a job site.

For example, if a subcontractor is drilling a hole and unknowingly disturbs asbestos that then pollutes the job site and other areas around the site, he could be liable for a pollution claim.

Coverage under these policies includes third-party bodily injury and property damage claims, cleanup, and legal defense.

Policies can include coverage for mold, legionella, silica, pollution conditions related to transportation of materials or wastes to or from a job site, and non-owned disposal locations.

Contractor Pollution Liability policies can also include coverage for third-party business interruption, diminution in property value, natural resource damages, and fines and penalties.

Finally, contractors will want to consider an insurer that can provide tools and services to help them better manage pollution incidents and provide a rapid response to quickly address the pollution itself, along with the reporting requirements and associated regulatory exposures.

The bottom line: Contractor Pollution Liability coverage needs to be part of your coverage strategy, because relying on a General Liability policy just won’t cut it and neither will expecting the EPA to continue its more relaxed stance.

Scott Carlson is the President of CCIG’s Construction practice. Reach him at or at 720-212-2040. You can also connect with Scott on LinkedIn.

CCIG is a Denver-area insurance, employee benefits and surety brokerage with clients nationwide. We do more than make sure you have the right policy. We help you manage your long-term cost of insurance with our risk and claims management expertise and a commitment to service excellence.

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