The Benefits of Project-Specific Contractor’s Pollution Legal Liability Insurance 

Construction projects require significant planning and resources. As the project progresses, one of the most important risk management practices is to ensure that everyone involved is adequately insured in case of a liability issue. Project-specific Contractor’s Pollution Legal Liability insurance (CPL) provides a unique opportunity to tailor an insurance policy to each construction project’s exact needs. In this article, we will explore the benefits of having a project-specific CPL policy form, what it can do for you, and how insurance brokers can help their insureds find the best coverage. By understanding the advantages of having custom protection for each construction project, you can make sure your projects have all the necessary coverage they need—and nothing they don’t. 

This article discusses project-specific Contractor’s Pollution Legal Liability insurance policies and how they can provide customized coverage for each construction project’s unique risks. Insurance brokers can play a crucial role in communicating project-specific requirements to the underwriter and guiding their clients toward the right coverage.

What is Project-Specific CPL Insurance?  

As the name implies, project-specific CPL insurance is a policy that can be structured to offer protection for:

(1) a contractor (project-specific for the contractor and their vicarious liability for their subcontractors) or (2) a contractor and their subcontractors (Contractor-Controlled Insurance Program) for liability from pollution conditions arising from their work at a specific job site.  

Coverage generally includes property damage, bodily injury, and cleanup costs arising from such pollution conditions. This is different from a contractor’s practice policy, which aims to provide coverage for all work performed by the named contractor, except for any projects that are specifically excluded from the coverage.

The project policy may also provide coverage for pollution-related losses that may happen after the completion of the project, during the completed operations period, or statute of repose. This period may extend for several years after the construction has ended. This policy allows insureds to have more control over their coverage by allowing them to:

• tailor the limits to meet the specific needs of the project;
• decide whether they want to offer coverage to their subcontractors in a wrap policy;
• manuscript policy language to meet the contractual needs of the project;
• bind a policy term that contemplates the duration of the construction work and any required completed operations period; and
• insulate their practice policy limits from exposure to the specific project.

How the Insurance Broker can help their client

Construction contracts for a given project can be complex.  Understanding the scope of work to be covered, who is to be insured under the CPL project policy, and identifying specific language requirements are all areas where the insurance broker can add value.  Communicating these items to the CPL underwriter helps keep the parties aligned with needs and expectations. 

Contract negotiations and changes may continue up to and even after the project has started. As the intermediary between the client and the insurance company, the broker plays a crucial role in ensuring that the project is adequately insured against potential risks. To prevent misunderstandings, it is imperative that the broker keeps the underwriter informed of any changes in the contract. This helps to ensure that the insurance policy remains up-to-date with the project’s evolving needs and can help prevent misunderstandings in the event of a subsequent claim.

CPL policies often have a menu of insuring agreements to choose from.  A broker that understands the exposure concerns and drivers for a given project can help ensure that their client has the proper coverages bound with adequate limits.  Your CPL underwriter is also available as a valuable resource and can help explain the various coverages available under the policy. 

The core coverage on a project-specific CPL placement is obviously protection for job site pollution incidents.  This coverage is generally available on an occurrence basis but may be amended to claims-made, in whole or in part, depending on the nature of the work being performed. 

For example, on a residential project, it is not uncommon that coverage for mold is written on a claims-made basis, while non-mold exposures remain written on an occurrence basis. Beyond the core job site coverage, there are many other exposures that the broker can help their client address under a project-specific CPL policy; these may include:

• Coverage for clean-up costs and evacuation expenses incurred on an emergency basis.
• Coverage for pollution protective loss arising from subcontracted contracting services.
• Contingent business interruption at the job site.
• Coverage for pollution incidents at an insured’s non-owned disposal sites.
• Coverage for pollution incidents during transportation to or from a job site.
• Supplemental coverage, such as disaster management and subpoena costs.
• Related legal defense expense, including supplemental defense outside of the limits of liability.

Partnering with Distinguished

At Distinguished, we understand that contractors face unique risks and require tailored insurance coverage. That’s why we offer specialized policies such as Contractor’s Pollution Legal Liability and Contractor’s Pollution and Professional Legal Liability. Our team of expert construction underwriters and environmental specialists has decades of experience and can assist you in finding the right coverage for your client’s specific needs.

In the unfortunate event of a claim, our in-house team of attorneys will guide your clients through the claims process, ensuring that they receive the support they need during a challenging time.

We are committed to providing customized insurance solutions that offer peace of mind and protection to contractors. Contact us today to learn more about our solutions and how we can help you find the right coverage for your clients.

About Distinguished Programs

Distinguished Programs is a leading national insurance Program Manager providing specialized insurance programs to brokers and agents with specific expertise in Fine Art and Collectibles, Environmental and Construction Professional, Executive Lines, Inland Marine, Real Estate & Builder’s Risk, Community Associations, Surety, 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’s high-limit Umbrella programs remain the clear choice in its area 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.

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