There are a multitude of American businesses that produce some type of pollutant throughout the course of daily business operations. A business can be held liable for some very costly damages when these byproducts pollute another property or harm another individual.
Pollution liability clauses were once part of General Liability policies, but the extensive asbestos problems in the 1970s spurred most insurers to remove pollution protection from their General Liability policies. Today, pollution liability protection is obtained through a separate Pollution insurance policy. Pollution insurance policies are being written for businesses of all sizes, shapes, and forms - from pig farms and prisons to apartment complexes, salons, and dry cleaning businesses.
Why Are Pollution Insurance Policies Needed? Many businesses run the risk of creating pollution during normal daily operations. There's also a risk from any existing pollution already on a business's site of operation. In either case, a business could be at a liability risk if its pollution ends up on another property and causes damage to the property or harms an individual.
What Do Pollution Policies Cover? The basic premise of a pollution policy is that an insured party gets a claim related to damages caused by pollution. The insured party then reports that claim to their insurer for their pollution policy to cover the claimant's property damage. Like most types of insurance, the specifics of a pollution policy can vary somewhat from insurer to insurer. Depending on the insurer, a pollution policy may cover damage only to properties -or- both properties and individuals; the cost of cleaning up pollution on another property; only pollution incidents from new pollution that occurred after the policy was obtained -or- incidents from both new and preexisting pollution; and investigative, legal, and court costs should the claim enter the legal system.
What Else Should I Know? There are several points that play a pivotal role in determining what type of policy a business needs. Prior to purchasing a pollution policy, a business owner should determine what insurance coverages are required for their specific situation and unique needs. It's also important to assess what degree of risk is shouldered by the business and have a quality assessment done on the business property.
In some geographical locations, Pollution insurance might be offered through the government. For example, the state of Washington has its own Pollution insurance program through the Pollution Liability Insurance Agency. Businesses can contact their local environmental agencies to obtain more information about any applicable programs in their area and Pollution insurance in general.
Don't overlook Pollution insurance as an important element of risk management. Contact our office with questions or concerns about Pollution insurance and/or insurance requirements.