Understanding Exposures and Filling in Coverage Gaps

All Commercial General Liability (CGL) policies contain some form of total pollution exclusion. Occasionally carriers are willing to give back limited coverage by endorsement; however, these endorsements do not typically address all risks, leaving a contractor exposed.

Below are some coverages to keep an eye on and how the CGL and CPL policies handle them.

Natural Resource Damage

A pollution incident may result in the destruction of plants, fish or wildlife. Having natural resource damage included in your policy could protect you from significant cleanup costs.

Generally not covered under the limited pollution CGL endorsement.

CERC requires coverage for natural resource damage including restoration costs. Generally included in a CPL policy.

Transportation Pollution

Products being transported by you or on your behalf could create claims should something happen in transit. Having coverage for transportation pollution will ensure you are protected for these types of claims.

Generally not covered under the limited pollution CGL endorsement. The CA 99 48 pollution endorsement available on the auto has limitations as well.

CERC requires coverage for 1st and 3rd party transportation pollution liability, including loading and unloading. Generally included in a CPL policy.

Mold

Whether mold fits the definition of a pollutant has been debated widely. Mold has the potential to lead to severe bodily injury or significant remediation costs. Having mold included in the definition can avoid coverage gaps.

Generally not covered under the limited pollution CGL endorsement.

CERC requires coverage for mold as a pollutant. Generally included in a CPL policy.

NODS (Non-Owned Disposal Sites)

Environmental laws make you responsible for your potentially hazardous waste even after it has been properly disposed of at an approved facility. Without NODS coverage, you could face claims for pollution created a long time ago.

Generally not covered under the limited pollution CGL endorsement.

CERC requires coverage for non-owned disposal site liability. Generally included in a CPL policy.

Work Performed at a Job Site

Although you might have coverage for your own location, what about another job site you might be at? Ensure that you and your operations are covered when you're working at someone else's property with this coverage.

Coverage may be limited to include just the insured’s premises and not work performed at a job site.

CERC requires a pollution policy that provides coverage for work performed at a job site. Generally included in a CPL policy.

Job Site Cleanup and Monitoring

Cleanup and monitoring of pollution incidents are often required by the government. Even if you're just at a job site and not your own property, these costs could be significant without the proper coverage.

Coverage may be limited to bodily injury and property damage, and if so, would not cover cleanup or monitoring.

CERC requires financial responsibility for cleanup and monitoring. Generally included in a CPL policy.