Best Environmental Liability for Construction 

5-Star Awards 2021: Construction Insurance

Environmental liability insurance covers companies that store or handle potentially toxic materials. It protects against exposures that are usually excluded from general liability policies. 

5-Star Excellence Awards

  • Beazley 
  • Berkley Canada 
  • Burns & Wilcox 
  • Cansure
  • Chubb 
  • Intact Insurance 
  • Markel Canada 
  • Premier Group 
  • SUM Insurance 
  • Totten Insurance Group 

What is environmental insurance coverage? 

Environmental insurance coverage, which is also called pollution coverage or pollution insurance, provides coverage for damages or losses after unexpected releases of pollutants. This type of coverage is usually excluded from property insurances and general liability policies. The damages or loss that environmental insurance usually covers are claims against property damage, clean-up costs, bodily injury, and business interruption. With very few exceptions, standard property insurance and general liability policies don’t include losses connected with pollution, like smoke from an out-of-control fire or fumes from air-conditioning system or faulty heating. 


Environmental insurance will also cover risks connect to historic operational issues or contamination like lead paint, mold, Legionella, asbestos, or poor indoor air quality. These types of policies are designed to protect real estate agents, mortgage lenders, developers, and managers in case the properties they handle are contaminated.  


What is MGL insurance? 

MGL insurance stands for marine general liability, or comprehensive general liability (CGL) insurance. Both MGL and CGL insurance policies provide third-party liability coverage for property damage, bodily injury, and, possibly, nuisance and trespass. These types of policies also provide coverage for the defense costs that the policyholder might spend in the event of a lawsuit. Cover under MGL and CGL policies may, however, be subject to different kinds of policy exclusions that might limit or bar insurance coverage for marine-related claims. An MGL policy might, for instance, contain a watercraft exclusion that omits coverage for damage from the use, maintenance, ownership, unloading, and loading of the boat. Generally, MGL insurance policies don’t duplicate protection and indemnity (P&I) insurance, but instead are meant to complement it.   


Can environmental remediation costs be capitalized? 

Under IRC section 162, environmental remediation costs can be deductible business or trade expenses. Under IRC section 263, however, companies have to capitalize expenditures that will add to a property’s value.  


What does a pollution liability policy cover? 

A pollution liability policy – which protect against liability from damage caused by hazardous waste materials – is one of the kinds of business insurance coverage an independent contractor might need. While on the job, independent contractors have to protect themselves against any claims of damage. Those who benefit most from pollution liability coverage would be companies that produce hazardous waste emissions during manufacturing – such as agribusiness, excavation, construction, oil, asbestos abatement contractors, and waste depositories. These types of policies cover property damage and injury claims, as well as, clean-up costs resulting from contamination from toxic waste materials.  


Pollution liability insurance covers third-party claims against property damage and bodily injury cause by hazardous waste materials spilled or released during the business’s operations. This type of insurance will cover you while you are finishing a job – and covers your completed operations. Should there be an issue with hazardous waste materials after you’ve completed the job, you’re protect from liability issues.  


In the late 1980s, insurance companies started excluding pollution liability under their general liability policies, which made it a necessity to buy separate coverage for pollution liability. For independent contractors, many jobs will need you to have this type of insurance and you’ll have to show evidence of coverage prior to starting the job.  


What is P&I insurance marine? 

P&I insurance, or protection and indemnity insurance, is a liability insurance for just about every maritime liability risk that comes with the operation of a vessel, other than those covered by the collision cause in a hull policy or a workers compensation policy.  


P&I insurance will protect ship operators and owners against third-party claims for bodily injury and property damage resulting from the operation of a vessel, with the exception of the limited collision coverage generally included in hull insurance. Different from most modern third-party insurance policies, P&I insurance is not liability coverage – it’s indemnity coverage. Therefore, these types of policies usually don’t need the insurer to defend the policyholder in the event of a lawsuit or reimburse a policyholder for losses unless the policyholder has already paid a third party.  


Does umbrella cover pollution? 

A key factor to guide you in your decision to purchase a personal umbrella policy is whether or not it covers the “gaps,” i.e., the liability risks you’re exposed to that are not covered by your primary policy. Usually, these are unique or specific situations from which liabilities might arise. There are umbrella policies that will cover sudden and accidental pollution that is usually not included in general liability policies (excluding seepage gradual pollution). 

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