Seasonal Exposures for Contractors
The spring season often brings unique challenges to contractors as work typically picks up, along with weather-related pollution concerns.
As winter begins to push to an end and spring starts to appear, contractors usually see an increase in work. This uptick in activity and projects can often result in an increased chance of experiencing a pollution event. Having the right pollution coverage in place for your contracting clients is key for them to remain secure and profitable.
Spring often means rain for many parts of the country; in certain areas, heavy snow melt can occur as well. Contractors need to be aware of water run-off and how it may affect their work. Street and road contractors, demolition contractors, excavations contractors, and masonry contractors (just to name a few) all have the added exposure of water run-off carrying a potential pollutant from their jobsite and resulting in a third-party claim. Runoff can provide an avenue for soil, jobsite chemicals, metal contaminants, and accidental spill releases to enter an area that could produce a pollution claim. Despite prevention techniques, claims do happen and can be very expensive for contractors. A recent story out of Utah involved a homebuilder being fined $250,000 by the Environmental Protection Agency (EPA) for this very issue. The homebuilder was also ordered to improve their water runoff procedures at current and future jobsites. These situations can be very expensive for insureds, so having a Contractors Pollution Liability (CPL) policy in place will provide much needed financial stability for insureds if a claim is brought against them.
Another area that becomes a concern as the temperature rises is mold growth. The wear and tear of the winter months may have produced new problem areas where mold may be susceptible to growth. Additionally, the wetter spring months can lead to an abundance of moisture in the air. Mold needs four key ingredients for growth; mold spores, mold food, appropriate temperature, and moisture. Mold spores and mold food tend to always be in high abundance. The warmer temperatures of April, May, and June combined with the added moisture in the air, can provide ample opportunity for mold growth. Preventing moisture remains the most effective way of preventing mold growth. Many contractors―including HVAC, insulation, window and siding, carpentry, drywall, roofing, and electrical― have this exposure. These contractors need to take added precautions to prevent moisture from entering the job area and make sure they are covered in the event of a pollution or mold claim. The presence of mold, mildew, fungi, etc. can also cause injury to people (namely respiratory illnesses), and can be very costly to remediate. A CPL policy with Mold coverage can be designed to defend and provide assurance to clients if they are found liable for microbial growth, and is often required to even secure work on a job. Spring is the start of a very busy and profitable time for most contracting operations. Even with proper controls and awareness of the pollution exposures they may face, contractors still may experience unexpected claims. Having a proper pollution policy in place can provide the security needed for the insured to succeed, no matter what the season.
How does Contractors Pollution Liability coverage work?
- Generally designed to address the coverage gap created by the CGL pollution exclusions.
- Policies usually written to provide coverage for operations performed “by or on behalf” of the insured.
- Coverage is provided for the insured’s operations away from their own premises.
- Base policies can be written on either a Claims Made or an Occurrence basis.
- Mold coverage is usually offered as an endorsement to the CPL insurance policy or coverage part. Mold is usually on a Claims Made form.
- Mold coverage may have a sub limit of liability, as well as its own deductible.
Coverage can include:Transportation Pollution Liability, Coverage for Microbial Matter, Non-Owned Disposal Site Coverage, Emergency Response Costs, Site Pollution Coverage for Insured’s Location(s), Incidental Professional Coverage, Blanket Additional Insured and Waiver of Subrogation.
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