What is Pollution Liability Insurance? ~ Insurance Academy

Almost any business can be accused of environmental pollution. Allegations can be made by customers, nearby residents, businesses, governments, nonprofits, or regulatory bodies. Until the 1970s, most policies belonged to business owner includes protection from pollution-related lawsuits brought against businesses. Since the outbreak of asbestos claims in the ’70s, businesses have generally had to purchase separate pollution liability insurance to protect themselves against this potential lawsuit.

Pollution Liability Insurance is a special form of liability insurance that helps businesses manage pollution clean-up costs and defend against pollution-related liability claims. Most policies provide cover for claims related to small-scale groundwater, soil, or air pollution. (Businesses that need cover for potential large-scale contamination may do better with Environmental Liability insurance.)

[Pollution Liability Insurance melindungi pemilik usaha dari tuntutan pencemaran lingkungan. Gambar: Nzherald]

What Businesses Can Benefit from Pollution Liability Insurance?

Any business that uses chemicals or materials may require pollution insurance. Businesses that work with substances known to be hazardous are not only considering a purchase, but those using chemicals or materials deemed safe may want a policy. Because chemicals and materials that are considered safe could prove to be dangerous in the future – and any company that uses them may be prosecuted.

The list of businesses that use chemicals and materials goes far beyond manufacturers with large factories. Other businesses that may benefit from having a policy include:

Contractor, because building materials used today may be dangerous in the future
Land clearing, because they use pesticides, herbicides, and fertilizers that can fertilize the soil
Swimming pool service companies, because the chemicals they use can contaminate nearby soil or water
Automotive repair centers, because they regularly work with oil and other harmful chemicals
Dry cleaners, because they also use potentially harmful chemicals on a daily basis

What guarantees does Pollution Insurance provide?

The coverage contained in a Pollution Liability insurance policy can often be tailored to the specific needs of a particular business. Some of the coverages offered are:

Guarantees for legally required cleaning of contaminants that have polluted the environment
Guarantee for environmental contamination that occurs during normal business operations
Coverage for cleaning the transfer of property that has been contaminated by the previous owner
Coverage for lawsuits and settlements arising from covered incidents
Companies that provide consulting or environmental cleaning services may add warranties that include an Errors & Omission guarantee. The Errors & Omission Guarantee can provide protection if a business makes a mistake in its work.

Many policies also offer protection for chemicals and hazardous materials that were used in the past before their effects were known.

What Factors Affect Pollution Liability Insurance Policy Premiums?
Insurers will consider a number of factors when calculating pollution policy premiums. Some of the items they take into account are: