If you’re an environmental professional, you know all about distinctive risk exposures. Thanks to them, insurance companies offer specialized coverage, tailored to the industry, and to the property owner and the lender that finances homes, commercial buildings and properties. This brief summary of related forms of coverage was compiled to provide related parties with an easy-to-read glossary on the subject.
Insurance for the environmental professional:
• Coverage of Errors and Omissions of Environmental Consultants
This insurance coverage protects the environmental consultant from lawsuits related to alleged faulty guidelines and instructions that result in economic damage. Attorney fee coverage is also included in the benefits of this type of professional liability policy.
• Environmental Contractor Bonds
Pollution and contamination cleanup contractors can purchase a supply and performance guarantee through an underwriter that provides special forms of indemnity to enhance industry-related liability coverage.
• Liability Coverage for Environmental Deterioration
Civil liability insurance for environmental deterioration is intended to cover what is excluded for the professional in its commercial general liability modality or policy. This coverage can be purchased through a specialized insurance company and includes compensation for damages suffered due to environmental deterioration and clean-up costs. It is important to review current commercial liability coverage to ensure there is no overlap, as well as to ensure there are no gaps in protection coverage, in the event that the commercial liability policy has an absolute pollution exclusion on the form. .
• Coverage of environmental remediation contractors
Environmental remediation contractors are relied on to clean up contamination from properties. Related liability risks include: insufficient or incomplete remediation, spreading of contaminated soil during remediation or excavation, air emissions from aquifers, rupture of underground pipes or utilities, spills or leaks from contractor tanks, mixing of materials or incompatible waste resulting from fire, explosion, release of hazardous vapors, and improperly installed tanks.
Insurance for the real estate buyer and the mortgage lender:
• Environmental Site Assessment Coverage
This type of appraisal is actually an inspection service provided by an independent, underwriter-approved engineering firm. The environmental assessment of the site must accompany the review and application for a lender’s environmental cost or property transfer liability insurance policy. Both the real estate buyer and the lender need this insurance to protect themselves from Superfund-like liabilities that can come from contamination of a property that was not discovered prior to its sale. This coverage can protect the insured from unforeseen costs related to cleaning up contamination discovered after purchase.
For a more in-depth discussion of environmental insurance, speak to an independent insurance professional.