Pollution Insurance Claim Examples: Don't Let Them Happen to You

A contractor was digging a foundation for a commercial addition, routine job. They severed a sewer line that they didn't know was there and raw sewage contaminated the job site and the neighboring property. Biohazard cleanup, $180,000 before a single lawsuit was filed, no pollution insurance. That's what a pollution liability claim looks like in the real world, let me show you more. Hi, I'm Gordon Coyle and for over 40 years, I have worked with seven, eight and nine figure business owners, helping them navigate the complex world of business insurance. I have seen every problem and costly mistake you can imagine and here I share the insider strategies and real world solutions that protect your business and save you money. In this video, I'm gonna walk you through what a real pollution liability claim looks like, what triggers them, what it costs and what the right coverage would have done. If this is useful to you, give me a thumbs up, thanks. Well, in that sewer line case I just described, this is one of the most common contractor claims I see and most contractors assume that their general liability covers it, it doesn't. Sewage is a pollutant under most GL policy definitions and it's gonna be excluded there. Here's another scenario that's increasingly common in the metro area, the contractor is hired to develop a site that was previously a gas station. Old underground storage tanks weren't fully disclosed. Excavation hits contaminated soil, the EPA gets involved, cleanup costs hit $400,000 before legal defense or third party claims even begin. The contractor had pollution liability but the limits were set years ago on a smaller job and didn't come close to covering this loss. And then there's mold. A general contractor completed a school building, two years after the job closed out, a faulty window installation was found to be letting moisture in. Mold developed, the sub who caused it was out of business and the GC had no pollution coverage. They paid out over $900,000 in costs out of pocket, completed operations two years later, big issue. Now let's look beyond contractors because this exposure just isn't limited to job sites. A manufacturer sent spent solvent to a landfill. 10 years later, 10 years, they received a letter from the EPA advising them that they were a potentially responsible party for the cleanup. Their share of the cleanup costs $2.4 million. One disposal decision made decades earlier. This is how environmental liability works. There is no statute of limitations on contamination. The EPA can come back years or even decades after the fact. And if you were ever connected to a site, even indirectly, even briefly, you can be pulled into a cleanup. Property owners face this too. Legionnaires disease traced to a building's water system, underground storage tanks leaking into neighboring properties, asbestos disturbed during renovation work that was supposed to be contained. In one Legionnaires case, the family of a woman who died received a $3 million settlement. These are not rare events. These are the claims I see referenced in underwriting files, in court records, in conversation I have with clients who didn't have coverage and wish they had. Every one of these claims has the same thing in common. The business owner either had no pollution liability or had coverage that didn't respond correctly because it was structured wrong. In almost every case, the right policy would have covered the claim. Cleanup costs, legal defense, third-party bodily injury and property damage, regulatory response. That's what a properly built pollution liability policy does but you have to have it before the claim happens and it has to be written correctly for your specific operation. What you need to take from these examples is this, pollution liability claims don't look the way most business owners expect. They aren't always a factory dumping chemicals. They're a sewer line nobody knew was there, a disposal decision made 10 years ago, a window that let moisture in and grew mold two years after the job was closed out. If your business touches any of these scenarios directly or indirectly, the question isn't whether you're exposed, it's whether you're covered or not. I've been doing this for over 40 years. The claims that devastate businesses are almost never the ones they saw coming. They're the ones nobody thought to ask about including their broker. If you've never had someone sit down and look at your actual pollution exposure, not just whether you have a policy but whether that policy covers what your business actually does, that's the conversation you wanna have. Schedule an appointment to have this conversation with me, 30 minutes, no obligation, no pressure, no nonsense, just an honest look at what you have. My contact info is in the description box below. And please subscribe if you found this useful or give it a thumbs up, thanks.