Environmental Insurance: Costs, Coverages, and Why Your Clients Need It
It may come as a shock to brokers and clients, but many pollution events are not covered by typical general liability (GL) or property insurance (PI) policies.
That means that if an underground storage tank leaks or asbestos is inadvertently disturbed on your client’s site, they may not be covered for the cost of cleanup, damages, or litigation that results.
That’s why most contractors and building owners or tenants could benefit from Environmental Insurance (also sometimes called pollution coverage). This insurance coverage protects your clients in case of a pollution event.
By learning more about this kind of insurance, what it covers, and how much it costs, you can ensure that your clients are fully covered regardless of any unfortunate environmental incidents that impact their property or job site.
What is Environmental Insurance?
Environmental Insurance is a broad overarching insurance program designed to cover fixed sites or contractors in case of environmental damage, which is not typically covered by a GL or PI policy.
For instance, if a storage tank leaks hazardous materials into nearby waterways, most general liability and property insurance policies won’t cover the costs related to cleanup, related business interruption, or ensuing litigation. That means your client would be left on the hook to deal with those costs themselves.
Environmental Insurance can fix these coverage gaps by offering your client specialized coverages like:
- Contractor’s Pollution Legal Liability Plus (CPL): Covers contractors in case a pollution event results from their contracting services or completed operations.
- Contractor’s Pollution and Professional Legal Liability Plus (CPPL): Provides professional liability coverage for contractors plus the above CPL coverage.
- Owner’s Professional Protective Indemnity Plus (OPPI): Provides site owners with indemnity coverage if subcontracting results in a professional loss or pollution event and the subcontractor’s limits are inadequate or unavailable.
- Pollution Legal Liability Plus (PLLP): Covers pollution conditions on, at, under, or migrating from the scheduled location(s).
- Follow Form Excess Liability: Provides additional layers of coverage on top of an underlying scheduled policy(ies).
What Does Environmental Insurance Cover?
Environmental Insurance offers all kinds of coverages designed to protect your client from the after-effects of a pollution event. This includes:
- Additional liability protection: A major pollution event can affect any number of homes, businesses, and municipalities in the near vicinity. Most general liability insurance policies won’t cover liability costs resulting from this event, which could leave your client open to massive legal bills.
- Environmental risks connected to historic contamination: Many pollutants don’t go away for a long time. Environmental insurance can provide liability coverage for pollution events that occurred before you took over ownership of the site.
- Emergency cleanup costs: The longer it takes to respond to an urgent pollution event, the more likely it is that the financial, environmental and human costs may increase. Environmental insurance will help cover emergency cleanup costs so that any contamination, either on or off-site, is contained as soon as possible.
- Third-party bodily injury: Provides coverage in case the pollution event causes bodily harm to others.
- Third-party property damages: Provides coverage in case the pollution event causes harm to the property of others.
What Situations Might Be Covered By Environmental Insurance?
Sometimes it can be easy for clients to brush off the need for specialized Environmental Insurance. This is natural. So it’s important you emphasize that environmental coverage is vital for nearly any kind of real estate or construction project, regardless of whether your client owns the site, are the contractor working on it, or have a contractual requirement to carry it.
Here are just a couple of instances where Environmental Insurance would come in handy:
- The contractor accidentally hits a sewage line while excavating, resulting in a spill that contaminates the surrounding soil.
- The contractor disturbs asbestos that they didn’t know was behind the wall, and now they have to clean it up, and there are tenant claims for bodily injury.
- The contractor installs windows incorrectly, and water gets in, causing mold.
- Your client disposes of contaminated soil incorrectly and gets dragged into a dispute with the local municipality.
- An accident on site releases contaminated water that must be cleaned up immediately before it spreads.
All of these are hypothetical, but they’re truly all too common occurrences that your client needs to be insured against in case it happens to them.
How Much Does Environmental Insurance Cost?
The cost of environmental insurance is an incredibly subjective topic. The costs of a policy will usually boil down to factors like:
- The ongoing operations of the location to be covered
- The historic use of the location to be covered
- The nature and amount of contracting work being performed
- The professional work being done
- Prior loss history
- Whether the contracting work is being done in-house or not
- The policy limits and retention amount
- The length of the policy term
- Policy exclusions
Truly, the best way to know what a policy might cost is to talk to an expert. At Distinguished, we can get you bindable quotes for Environmental Insurance in as little as three days, with rush options available on a case-by-case basis. Contact us today to get started.
The Benefits of Environmental and Construction Professional Insurance with Distinguished
Despite its rising popularity, the field of environmental insurance is still very much maturing. To make sure your client gets the right coverage for their location or contracting business, you need to ensure you’re working with experts in the field.
At Distinguished, we offer a product that can help you and your client get exactly what they need because we offer:
- Responsiveness: An in-house team means that everything is done quickly.
- Expertise: We’ve been in this industry for decades and know how to get you appropriate quotes quicker.
- State-of-the-art coverage: Our policy forms are best-in-class and are offered through an A- rated carrier.
- Customization: Over the years, we’ve seen it all. If you think your client is a niche case, we can find a way to creatively make sure that they get a policy that covers their unique environmental exposures.
- Superior claims handling: Our in-house environmental claims team of attorneys understands the industry and are on hand to answer your questions and guide clients through the claims process.
Get a Quote For Distinguished’s Environmental and Construction Professional Insurance
At Distinguished, our Environmental and Construction Professional Insurance products stand out as an industry leader backed by experts with years of experience in this field. If you want you and your clients in good hands, register your brokerage today, and we can start getting you a custom quote that fits your client’s needs.
To learn more about our specific policies, you can also explore some of our product pages below:
- Environmental and Construction Professional Insurance Overview
- Contractor’s Pollution Legal Liability Plus
- Contractor’s Pollution and Professional Legal Liability Plus
- Owner’s Professional Protective Indemnity Plus
- Pollution Legal Liability Plus
- Follow Form Excess Liability
FAQs About Distinguished’s Environmental and Construction Professional Insurance
Who is the carrier for Distinguished’s Environmental and Construction Professional Insurance?
Our coverage is provided by SiriusPoint, an AM Best and S&P A- rated carrier.
What limits do you offer?
Liability limits are available up to $25,000,000 per occurrence / $25,000,000 in aggregate.
How do I submit business?
For new brokers: First, register your brokerage and then send a filled-out application to Doug Stepenosky at DStepenosky@distinguished.com.
For returning brokers: Feel free to contact your favorite Distinguished Environmental and Construction Professional Underwriter.
Not seeing the answers you need?
Check out our more detailed Environmental and Construction Professional Insurance FAQ page, or reach out to one of our insurance experts for more details.
About Distinguished Programs
Distinguished Programs is a leading national insurance Program Manager providing specialized insurance programs to brokers and agents with expertise in Real Estate, Community Associations, Hotels, and Restaurants. Property and liability products are distributed through a national network of agents and brokers. Serving the same core markets and partnering with the most stable and reputable carriers, Distinguished Programs’ high-limit umbrella programs remain the clear choice in its areas of specialty for superior coverage, competitive pricing, and attentive service. Through thoughtful innovation, stemming back to 1995, Distinguished Programs fosters growth and opportunities for its brokers, carriers, and employees.
View a full list of our programs and submit business with Distinguished.