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Pollution Insurance

What is Pollution Insurance — and Do You Need It?

For More Information Please Contact:

 Beverly Zolnowski



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In 2010, the Philadelphia Housing Authority (PHA) paid more than $9 million dollars to the family of a girl who became severely disabled because of mold in her privately-managed apartment. The apartment was subsidized with public money and inspected by PHA.

Clearly, Pollution Insurance policies aren’t just for massive waste management companies or oil industry giants anymore, as evidenced in the PHA example.

In fact, many kinds of organizations — from real estate developers to hospitals — require Pollution Insurance as coverage for the risk of producing, storing, or emitting hazardous waste materials, as well as to cover exclusions in existing policies related to mold and other microbial matter.

So why do you need a separate policy outside of your Commercial General Liability policy?

In the1980s, many carriers of General Liability policies eliminated coverage for pollution-related claims. As a result, coverage for existing and potential hazards has to be purchased separately.

To make matters even more complicated, there are over 100 different types of Pollution Insurance policies available. Some of these include Contractors Pollution Liability, Brownfield Restoration and Development, Asbestos Containment, Water Quality Insurance, Automobile Pollution Liability, Cleanup Cost Cap, and Secured Creditor Insurance.

Highlights of many of these policies include coverage for:

• Bodily injury, including mental anguish and shock.
• Property damage, including loss of use of tangible property, whether due to physical damage or not, and cleanup costs.
• Defense costs, charges, and expenses incurred in settling a claim, including compensatory damages for personal injury and property damage.
• Extended discovery period. The 12 or 24 month extension of coverage provision is an important option considering the nature of exposure.

While environmental losses are infrequent, they’re typically expensive when they do happen.
And a Pollution Insurance policy — tailored to the specific needs of your organization — remains the best means of transferring and financing pollution risk.

This information is advisory in nature. No liability is assumed by reason of the information in this document.

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