May 22

Real Life Examples of Contractor Pollution Claims.

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Why do all types of contractors need Contractor Pollution Liability?

Because environmental claims can happen to any type of contractor.

Many non-environmental contractors assume that claims arising from operations are covered by their general liability policy. Most commercial general liability policies have total pollution exclusions which leaves contractors bare in the event of an alleged environmental claim. The Contractor Pollution Liability Policy (CPL) is designed to cover them for accidental pollution incidents which could cause possible severe financial harm to them.

The following examples are a sample of the types of claims that could happen to a non-environmental contractor and have a devastating effect on their companies.

For more information on how to protect your insured’s from potential economic disaster, contact National E&S Insurance Brokers at (661) 266-4444 or visit our website at www.nationaleands.com or email us at info@nationaleands.com . National E&S is a wholesale insurance broker working only with licensed insurance agents and brokers in 46 states. Please ask your insurance professional for more information on this valuable coverage.

Concrete contractor — A concrete contractor laid an undercoat of slag while creating a new runway for a large international airport in the Midwest. After the runway was complete, it was discovered that the slag was contaminated and was leaching pollutants into a tributary of one of the Great Lakes. The claim exceeded $400,000.

HVAC contractor – Installed an HVAC system in a new office building. Within weeks after opening, the building had to close due to occupants being overcome with breathing problems and headaches. The contactor was one of many parties sued. During discovery, it was determined that the HVAC system was installed exactly as the specs described. However, the contractors had to absorb over $250,000 in uncovered defense costs because he had no environmental coverage, therefore, no defense costs.

Paving contractor – After laying the “tack” coat of Naphtha in preparation for the final coat of blacktop on a new road job, a heavy rain hit, washing the toxic material into a drainage ditch along the road and, subsequently, into a stream. The clean-up of this claim cost over $150,000.

Mechanical contractor – A contractor was called to a site where an underground storage tank was being removed. He was contracted to loosen a heavy coupling for which the tank removal company did not have the adequate tools. Several days after leaving the site, having shaken the pesky coupling free, the contractor was notified that he was being sued for the tank leaking underground, spilling hundreds of gallons of gasoline into the soil. It seems that the contractor dropped a heavy wrench down the intake spout of the fiberglass tank, cracking the bottom, and causing the leak. Total costs to defend himself (He alleged that there was no way of knowing whether something else caused the leak.) and pay damages exceeded $250,000.

Painting contractor – While painting the interior of a nursing home, the contractor was sued by over a dozen residents alleging that fumes as a result of inadequate venting overcame them. Total claim was over $200,000.

Janitorial contractor – Working at a mall, a cleaning company inadvertently mixed cleaners, one ammonia based and the other chlorine based. The result was a toxic cloud of ammonia chloride that caused respiratory distress in dozens of shoppers. Total cost of this claim: $175,000.

Pipeline contractor – A contractor suffered a large claim when he installed a new storm water drainage system for a municipality in MI. Not long after completion a very heavy rain struck the city, causing a backup of water with human waste into the basements of over 100 high-priced homes. The contractor was sued fro installing inadequate system and the environmental insurance carrier paid over $800,000

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