Pollution Liability

What Environmental Risks Do Contractors Face?

Every contractor works with materials and processes that can affect the surrounding environment. Fuel spills from equipment, dust and debris that migrate off site, chemical releases from adhesives or solvents, and disturbed soil that runs off into waterways are all part of everyday construction operations. When these incidents cause harm, general liability typically will not cover the cleanup or resulting claims.

Pollution liability insurance addresses this gap. It protects contractors when their work causes contamination or environmental damage that injures people, damages property, or requires remediation.

When Would This Coverage Actually Apply?

Environmental incidents happen more often than most contractors expect. Consider these real situations:

A concrete contractor was cutting and grinding at a commercial property when silica dust drifted onto neighboring businesses. The fine particulates contaminated HVAC systems and inventory at adjacent buildings. The resulting cleanup and property damage claims far exceeded what general liability would cover.

An excavation crew struck an unmarked underground storage tank while digging foundations. The tank ruptured, releasing petroleum into the soil. State environmental regulators required immediate containment and long-term remediation that stretched across multiple years.

Other common scenarios include equipment fluid leaks at job sites, improper disposal of construction waste, disturbance of lead paint or asbestos in renovation projects, and stormwater runoff carrying sediment into protected waterways.

Why Does My General Liability Exclude This?

Standard commercial general liability policies contain pollution exclusions specifically designed to carve out environmental incidents. These exclusions exist because pollution claims can be extraordinarily expensive and extend over long periods. Insurance carriers created separate pollution products to properly underwrite and price this specialized exposure.

The pollution exclusion means that even if your general liability policy covers property damage, it likely will not respond when that damage results from a pollution event. This gap catches many contractors off guard when they file a claim expecting coverage that does not exist.

What Does Contractors Pollution Liability Actually Cover?

A comprehensive pollution policy provides several layers of protection:

• Third-party bodily injury and property damage: Coverage when your pollution incident harms people or damages property owned by others
• Cleanup costs: Expenses for containing, removing, and remediating contamination at job sites
• Legal defense: Attorney fees and court costs when you face environmental claims or regulatory actions
• Transportation liability: Protection during the transport and disposal of construction waste and materials
• Regulatory penalties: Coverage for fines and penalties imposed by environmental agencies

Many policies also address microbial contamination including mold, bacteria, and fungi, which has become an increasing concern in construction. Some include coverage for completed operations, protecting you even after the project wraps up.

Environmental claims are rising significantly each year, driven by increased regulatory scrutiny and growing awareness of contamination risks. For contractors who work with hazardous materials, perform excavation or demolition, or operate in environmentally sensitive areas, this coverage has moved from optional to essential.