A must-have for many businesses
Many business owners are unaware their standard business package insurance will not cover pollution remediation. It’s likely that contractors and other professionals working on major infrastructure and construction projects will have appropriate cover, but the cover is not just for heavy industry. Businesses with high risk include dry cleaners and hair salons due to chemicals they store and use. Service stations are vulnerable because of the potential leakage from underground storage tanks and pipes corroding over time.
Recently there was a $300,000 clean-up claim from a contractor that had serviced pipes at a petrol station. An explosion at a sewerage plant, some kilometres away, was traced back to the service station, and it was discovered that pollutants had flowed into the water table.
Pollution incidents are not confined to heavy industrial sites, they can also be caused by small businesses or individuals such as contractors or subcontractors – for example, due to a failure to install proper sediment controls while undertaking earthworks.
Independent contractors need to protect themselves against any claims of damage caused by the work they do or have done. One type of cover that may be suitable is pollution liability insurance. This cover protects an entity against liability from damage caused by hazardous waste materials. The reality is that environmental clean-up projects can cost millions of dollars.
It’s too late to buy cover if you cause an incident and you should be aware that pollution liability is not covered under a general liability policy. Some policies may provide coverage only for sudden and accidental events, but exclude gradual pollution events and the cover may specifically exclude clean-up costs.
Mould, Legionella, noise and odour are also considered pollutions and may be covered by an environmental insurance policy.
If you think you may have a risk of hazardous waste exposure in your business operations, it is a good idea to consult with your insurance broker about the need for pollution liability insurance.