Podcast: Environmental Exposure and Coverage Options
By Amanda M. Leffler & Marc Holland on August 14, 2018
The Issue. There are multiple exposures for releases of hazardous materials to soil, water and air during construction activities. Projects also present post-construction environmental exposures related to defective materials and/or workmanship.Why It’s Important. There is increasing awareness of contractor exposure to claims for releases of pollutants at the job site and from completed operations. Many contractors, however, are uninsured or underinsured for these risks.
• Recent high-profile claims related to water contamination (Flint, Freedom Industries) have demonstrated that even the peripheral participants (e.g., engineering consultants and contractors) are exposed to significant defense costs and damages in large class action lawsuits.
• Environmental exposures may be excluded from General Liability policies and, historically, this coverage was not regularly purchased by the construction industry. However, heightened owner awareness has recently resulted in an increase in specific contract requirements for pollution coverage.
• There is a significant trend in large loss claims for mold at commercial habitational buildings. Contractors (particularly those involved in HVAC installation, roofing, curtain walls/windows) are exposed to latent mold and indoor air quality claims that may not surface for many years after construction is complete.
Short Answer. The market for Contractor and Professional Pollution Liability is very competitive, such that coverage is affordable and readily available. As awareness of water and indoor air quality issues and claims continues to increase, contractors should be aware that environmental insurance is a cost-effective measure to backstop these exposures.
This Podcast is intended to provide information generally and to identify general legal requirements. It is not intended as a form of, or as a substitute for legal advice. Such advice should always come from in-house or retained counsel. Moreover, if this Podcast in any way seems to contradict the advice of counsel, counsel's opinion should control over anything written herein. No attorney-client relationship is created or implied by this Podcast.
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