Understanding Contractors Pollution Liability

Understanding Contractors Pollution Liability

These days, the spotlight is squarely on the environment. Legislation is ramping up, and public awareness and enforcement costs are on the rise. If your business is responsible for causing pollution, the impact on you can be costly. Contractors Pollution Liability Insurance covers your business for unintended and unexpected pollution damage you cause.

Contractors Pollution Liability Insurance protects you from pollution and asbestos clean-up costs. It also extends to related defence costs and liability for injury and property damage.

The construction industry is ranked by the Environment Protection Authority as one of the sectors with the highest polluting potential. Construction activities can cause significant water, soil or air pollution, the risk being affected by the site specifics, the chemicals and pollutants involved and the exposure pathways. And a contamination event – whether sudden or gradual, or even concealed over time – has the potential to hit a project hard, financially and can create bad publicity.

Case Studies

Here are some examples of what Contractors Pollution Liability Insurance would cover:

Sewerage pipe defects causing pollution

A subcontractor improperly installed a sewer pipe, resulting in raw sewage migrating into the underlying groundwater and contaminating nearby residential properties. Injury and property damage claims were filed against the contractor, and the builder had to indemnify third parties and pay defence costs exceeding $425,000.

On-site fuel tank leak causing pollution

A diesel fuel tank was delivered to the site. It was used for months before a resident alerted the earthworks contractor to discolouration of the water in the local creek. The tank turned out to have a leak in the base. Fuel had soaked into the ground and found its way into the creek. The contractor put containment booms along the river bank, but clean-up of the contaminated soil and groundwater took months. Costs came to around $500,000 and criminal prosecution and fines were considered.

Asbestos disturbed on site requiring clean-up

An electrical contractor working on refurbishment of a second-floor tenancy stepped into a small hole cut in to the floor. His foot broke through the ceiling of the retail store below. Asbestos insulation within the ceiling void contaminated the tenancy below. Clean-up and reparation costs were around $250,000.

What’s Covered – And What’s Not?
Clean-up costs and liability for injury and property damage arising from (even slow release of) pollutants.
Pollution that you knew about, or could have foreseen as a problem
Clean-up costs, defence costs and liability for injury and property damage arising from asbestos that is inadvertently disturbed on a work site.
Asbestos that was in-situ and undisturbed in any structure
Mould with a $50,000 limit of liability*
Deliberate or wilful non-compliance with a law, notice by a regulatory authority
* Depending on your region and risk

Depending on your current insurance policy, Contractors Pollution Liability may be an optional extra for your Single, Annual Construction Insurance or Contractor’s Plant Insurance. For a quote on a more comprehensive Pollution Liability Insurance policy with higher limits and more features, talk to CRM Brokers today on 1300 880 494.

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