Finding the Right Insurance Fit For a Trade Contractor

It is a misconception that the only people who have pollution exposures are those involved with hazardous substances. Unfortunately, this is not the case. In truth, anybody who works with, or can be held responsible for, the release of a substance into the environment that meets the definition of a “pollutant” in the ISO exclusion has a pollution exposure.

Trade Contractors are in a uniquely challenging position. While their responsibilities are often narrowly defined in the scope of services, they are usually one part of a multi-part process. This means that any claims that arise from a site may be brought against any or all of the contractors who performed operations at the location. And if the claim alleges something that is excluded by the contractor’s CGL policy, defense may not be provided.

Specific job site exposures that different types of trades have:

•Disturbing or exacerbating existing pollutants: Many contractors move earth, excavate, demolish, or otherwise alter existing features of a property. If any of those contain hazardous substances (petroleum contaminated soil, asbestos containing building materials, etc.), the contractor can be held responsible even though he was never advised that he would be.

•Contamination caused by materials the contractor brings to the site, such as paints, cleaning solvents, fuels, lubricants, etc.

•Contamination caused by operations, such as cutting through a gas line, installing flashing around window incorrectly, installing piping improperly, failing to solder joints, roofing leaks, erosion at site causing offsite contamination, etc.

•Contamination for which the contractor is held responsible, such as operations of a subcontractor to the trade contractor and actions of a party delivering materials to the site for the contractor.

In addition to job site exposures, Trade Contractors also have exposures at the premises they own. This property, where they store their equipment and supplies, is often the single largest equity investment they have. Pollution at that location could reduce its value tremendously, effectively wiping out the equity built up by the owners.

The final exposure area to note is Over the Road Pollution. This is the exposure that vehicles have going from owned premises to job sites. The upset and overturn of a vehicle can cause significant contamination, even if only from small amounts of fuels or solvents they use in their everyday work.

Fortunately, there are coverages available to address all of these exposures:

Contractors Pollution Liability is designed to protect the Insured for claims stemming from pollution conditions at, on, or emanating from a job site arising where they are performing their operations.

Premises Pollution Liability is coverage designed to protect against losses arising from the scheduled premises, which in this case would be the contractor’s owned properties.

Over The Road Pollution is of course, coverage for pollution events during transit.

All of these coverages are accessible for most trade contractors, and they are all affordable. Many can be purchased together in packages, or separately depending on the needs of the particular insured. For the trade contractor faced with many exposures that are effectively out of their control, consideration of this type of coverage is very important. In the current softening market, enhancing a client’s coverage can be done for little additional premium and will help secure your relationship going into the future.