Anthony Kammas, a partner at Skyline Risk Management, said in a recent report that the Environmental Protection Agency (EPA) noted that construction firms are great contributors to environmental damage, because of the nature of their work.
However, Kammas said that most construction firms do not recognize the environmental risk that their undertaking entails.
Thus, he noted a few reasons for considering taking out environmental insurance coverage.
Among others, he said, most general liability and professional liability policies do not include coverage for pollution claims.
In addition, toxic chemicals, such as solvents, fuel, and finishers, used in job sites can lead to a pollution claim in the event of improper disposal or accidental spill.
Companies also have exposure resulting from hazardous materials such as fiberglass, asbestos, lead paint, and mercury, especially when they are not properly disposed of.
The lack of safe drainage that could cause stormwater runoff from project sites could also lead to claims.
Inadvertent puncturing of an underground pipeline or storage tank could lead to the release of hazardous materials, resulting in risks.
“All of the episodes listed above can affect general contractors and subcontractors as well. Any contractor or subcontractor that becomes a party to a project can be held directly or indirectly responsible for a pollution claim and the significant costs of
remediation,” Kammas explained.
He concludes, “Construction is a highly regulated and litigious industry. General contractors and subcontractors should take steps to transfer the risk of polluting the environment and the costs associated with cleaning up environmental damages.”
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