Today’s environmental risks are more complex than ever, and they’re constantly expanding as economic, workforce and regulatory issues continue to evolve. The risk of getting caught up in a costly pollution liability claim is greater than ever before.
Let’s look at some of these evolving construction pollution risks:
- Emerging products. Examples include fly ash-contaminated drywall in residential construction, and new “eco-friendly” products that are developed and thrust into the market too quickly, resulting in unexpected issues, such as materials that are hydrophilic and foster mold growth.
- Changing regulations. The U.S. Environmental Protection Agency (EPA) continues to target new environmental concerns and beef up enforcement of existing regulations. For example, in recent years the agency has tightened the rules for storm water discharge and been more proactive about enforcing regulations controlling lead dust and debris.
- Leadership in Energy & Environmental Design (LEED) certification If a project is marketed to high-end residential buyers or tenants as a platinum LEED building and only achieves a gold level certification, those buyers or tenants could sue for breach of contract.
- Economic and workforce trends. The continued lack of skilled labor can lead to costly mistakes. When demand is greater than supply, contractors that take on projects outside their areas of expertise, placing them in unfamiliar pollution risk territory. For contractors looking for work in other states and jurisdictions, even abroad, there are localized environmental concerns and differing environmental and insurance regulations in each locale.
Bottom line: Contractor’s pollution liability coverage (CPL) is a necessity.
Keep in mind, many pollution risks are excluded or severely limited by standard CGL policies, and that can leave you with a potentially dangerous coverage gap – one that could eventually jeopardize your bottom line and your reputation.
With the ever-expanding focus on environmental concerns, even the most pollution-conscious businesses are getting serious about protecting themselves against the litigation, penalties and financial consequences that could result from an unforeseen environmental disaster.
Fortunately, pollution liability policies are also evolving.
CPL policies today offer affordable coverage for an increasing range of environmental risks. This is especially good news for small to mid-sized contractors that haven’t considered pollution liability coverage before, but whose operations could still create significant environmental risks. Many CPL policies even cover such things as:
- Crisis management expenses
- Litigation and subpoena expenses
- Green building materials
- First-party indemnification
CPL coverage could even be a requirement on some projects today. The coverage is increasingly being required as part of the insurance specifications in project bids.
Is your financial protection keeping pace with today’s construction pollution risks?
To find out, partner with an agent who understands the needs and challenges of your industry. At Higginbotham Insurance, we understand the construction industry and offer a wide range of specialized construction insurance coverages to protect every aspect of your construction business and projects. Contact us to learn more about how we can help protect you from today’s evolving pollution risks.