Pollution Liability Insurance: What You Need to Know

It’s not always the first thing we think of when we think insurance, but liability coverage is one of the most vital parts of a healthy insurance portfolio. Liability coverage is what covers your business when a lawsuit is brought against you for damage caused to others and their property.

In previous posts, we have gone over why every business– regardless of size – needs general liability insurance, why all businesses with more than one employee need employment practices liability, why most businesses need advertising injury coverage, and why establishments that serve alcohol need liquor liability insurance.

Now, we turn to another hot topic in the world today: the environment. There’s liability coverage for that too.

What is Pollution Liability/Environmental Insurance?

Pollution Liability insurance, also referred to as environmental insurance, is designed to cover businesses or contractors if their work or operations cause environmental damage.

What Does Pollution Liability Insurance Cover?

In addition to clean-up and remediation costs for contaminated areas, pollution liability insurance also covers third-party property damage and bodily injury.

What does that mean? If, in the course of your operations, hazardous materials cause damage to someone else’s property or cause physical harm to another person, pollution liability insurance will cover the damages.

These policies cover you while you are working, and once you have completed the job.

Who Needs Pollution Liability Insurance?

Some commercial insurance policies include a small amount of coverage for specific types of pollution or environmental damage, but most exclude coverage for pollution. Contractors and businesses working in certain industries need more than what is automatically included:

  • Construction
  • Restoration
  • Water/sewer
  • Oil/gas/energy

Why Buy Pollution Liability Insurance?

In short, your business should buy pollution liability insurance to save money.

The cost of remediation for environmental damage can quickly climb into the millions. (For claims examples, read this Canadian Underwriter article.)

What Does Pollution Liability insurance cost?

The annual cost of a pollution liability policy varies based on the amount of coverage your business requires, and the risk associated with your operations.

To get a quote for your business, click here.