Fixed Site Pollution Insurance

Site Pollution, Environmental Impairment Liability, Premises Pollution, Pollution Legal Liability…whichever term you’ve heard or are familiar with, they are all Claims Made policies which provide an insured with the same basic coverage for pollution conditions arising at, on, upon, or migrating from their owned/leased location. Although there are many situations that warrant this type of coverage, here are the most common scenarios that drive interest:

  • An insured’s desire to protect himself/herself against liability from third parties.
  • Operations performed at the site prior to and during ownership.
  • To meet contractual requirements for a property transfer, new construction, or refinancing.

Each location is individually underwritten to make a determination as to the extent of coverage that can be offered. For example, a clean site without a history of adverse operations or pollution conditions and where relatively benign operations are now being performed, can typically purchase broad coverage to include First Party Onsite Cleanup, Third Party Bodily Injury/Property Damage, and Offsite Cleanup for both new and pre-existing conditions (no retroactive date). However, often there are circumstances at a location that may require customizing coverage by establishing a retroactive date, providing coverage only for conditions that arise and are reported after this date and within the policy period. Additionally, policies can be tailored to fit very specific needs, such as limiting coverage to just onsite cleanup, or offsite Bodily Injury. It is this flexibility that makes these policies very powerful risk management tools. Most coverage forms are fairly flexible and coverage is always Claims Made.

Coverage is triggered either by a claim for damages from a third party, or by the discovery of contamination above “Action Levels” on the insured’s premises. “Action 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, you will need to clean up the site to whatever level is allowable by the governing authority.

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