We have all heard the current news about the oil spill in the Gulf of Mexico and its devastating effects on the environment, wildlife, and the fishermen whose livelihoods depend on the now-contaminated waters. But what about the hotels, golf courses, and other coastal properties that may be affected? Agents around the country working with facilities and commercial properties should use this situation as an opportunity to examine their clients’ current insurance policies and make sure the right coverage is in place.
Facilities have the potential for very unique pollution exposures due to their size, daily operations, and the amount of goods typically stored or handled on-site at any given time. To protect against waste that may threaten a facility, any operations which could result in a pollution exposure, or fires, floods, and other natural disasters, owners and managers of facilities should have Site Pollution coverage in place.
Why is Site Pollution coverage important?
Site Pollution Liability insurance, also known as Premises Pollution, Environmental Impairment Liability (EIL insurance), and Pollution Legal Liability (PLL), is designed to cover claims arising from pollution releases at, on, or emanating from a specific scheduled location. A “location” can be as broad as an entire piece of property or as narrow as a specified storage tank. Site Pollution Liability insurance is important because claims arising from a pollution condition from an insured’s premises may not be covered via the insured’s General liability or Property coverage form.
What types of facilities should carry Site Pollution coverage? Hotels, manufacturing facilities, warehouses, landfills, golf courses, recycling centers, restaurants, recreational facilities, and other commercial properties. All of these sites have the potential to experience, or be involved in, a chemical spill, natural disaster, midnight dumping, ground water issue, or other unforeseen exposure.
How does Site Pollution insurance work?
- Coverage is triggered either by a claim for damages from a third party, or by the discovery of contamination above “Actionable Levels” on the insured’s premises.
- “Actionable Levels” are a very important concept to understand. These levels are set in every community on a federal, state, or local level. They represent the allowable concentration of any contaminant for the area in which the contaminant is discovered.
- Policies clean up pollutants to the acceptable level dictated by the governing authority. In other words, if you have pristine land on which you spill diesel fuel, the government will require cleanup to below actionable levels of petroleum contaminants.
- Coverage can be modified to cover only new conditions occurring from policy inception onward, or unknown pre-existing conditions, or both.
- Coverage can be constructed to apply to only On-Site Bodily Injury, Property Damage, and Clean Up, or only Off-site, or both.
- Coverage is very flexible.
- Coverage is almost always Claims Made.
- Available product enhancements can often include first and third party Transportation Pollution Liability, Natural Resources Damages, coverage for scheduled Storage Tank systems, Mold coverage, Extended Reporting Periods, and coverage for Non-Owned waste disposal sites.
The current oil spill is a perfect example of a pollution event happening in one area and carrying over into another. Site Pollution Liability can help protect your clients’ facilities in the event of a problem like this occurring either on-site or on a different property/area and spilling over onto the insured’s premises.
To learn more about Site Pollution coverage or to discuss a specific account, call us today at 1-800-596-2156. You can also visit Beacon Hill’s Site Pollution webpage for more information.
