Rancho Mesa's Alyssa Burley and Vice President of the Construction Group Sam Clayton discuss how a pollution liability policy is best for protect a contractor during a pollution incident.
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Director/Host: Alyssa Burley
Guest: Sam Clayton
Producer/Editor: Megan Lockhart
Music: "Home" by JHS Pedals, “News Room News” by Spence
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transcript
[Introduction Music]
Alyssa Burley: Hi! This is Alyssa Burley with Rancho Mesa’s Media Communications and Client Services Department. Thank you for listening to today’s top Rancho Mesa news brought to you by our safety and risk management network, StudioOne™. Welcome back, everyone. My guest is Sam Clayton, Vice President of the Construction Group with Rancho Mesa. He specializes in commercial insurance for concrete, utility, street and road contractors. Today, we're going to talk about pollution liability. Sam, welcome to the show.
Sam Clayton: Good morning, Alyssa. Good to be back in StudioOne™.
AB: Nice to see you. So, no matter what the trade, contractors of all kinds face environmental risks from their operations. And contractors’ pollution liability insurance has now become an integral part of the contractors’ insurance program. The industry as a whole is seeing pollution coverage as a contractual requirement from owners, developers and general contractors for projects of all sizes. Is this type of insurance really necessary or is pollution covered by a general liability policy?
SC: That's a great question, Alyssa. While many contractors assume their commercial general liability policies would cover a pollution claim, the unfortunate reality is that most CGL policies have a pollution exclusion that leaves contractors uninsured in the case of a pollution incident.
AB: All right. And what would be considered a pollution incident?
SC: Pollution incidents are caused by some type of contamination at a job site. And contamination is the key word in all pollution exclusions. With such a broad definition extending to so many types of construction, it is important to understand how a pollution incident can happen on the job site. So, pollution incidents can happen to contractors in many trades. Real world examples include: suppose that an excavation contractor is moving dirt from one area of a job site to another and the soil is contaminated with arsenic and lead. The chemicals are then spread to a large area which is later found by a soils expert. Another example would be construction equipment on a project site that has hydraulic fuel lines that are cut by vandals, causing fuel to leak out and contaminate the soil. Third example would be a contractor punctures an underground storage tank during excavation, causing the product to spill into the soil and groundwater.
AB: Okay, so, there are a lot of different ways a pollution claim can happen on a job site. In addition to implementing an effective plan to reduce the likelihood of pollution incidents on a job site, it sounds like a best practices approach to protecting contractors from this type of exposure is to transfer the risk to a pollution liability policy. How does this type of policy protect the contractor?
SC: A contractor's pollution liability insurance provides coverage for third party bodily injury, property damage, and pollution, as well as cleanup costs as a result of pollution conditions for which the contractor was responsible for. A pollution incident can include the discharge of pollutants brought to the job site by the contractor, a release of preexisting pollutants at the job site or other pollution conditions due to the performance of the contractors or lower tier subcontractors operations. In addition to the potential loss of reputation by the contractor, often overlooked expenses that can negatively impact a profit and loss statement are the costs incurred to defend the contractor that's involved in a pollution claim.
AB: All right, so, all really good things to think about. Sam, if listeners have questions about their pollution liability, what's the best way to get in contact with you?
SC: They can contact me at 619-937-0167 or my email address is sclayton@ranchomesa.com
AB: Sam, thanks for joining me in StudioOne™.
SC: Thanks, Alyssa.
AB: So, do you have time for a couple of rapid fire questions? Super easy.
SC: Yeah.
AB: Okay. So, would you rather eat at a food truck or a fancy restaurant?
SC: Food truck.
AB: All right. Mac or PC. And do you need clarification on what each of those mean?
SC: Yes. I'm technology illiterate, so, yes. But, I think I know the difference. PC.
AB: All right. Snowboard or hiking?
SC: Neither, skiing. I don't snowboard.
AB: Yeah
SC: But I'd rather ski.
AB: Right.
SC: And hiking is- I can walk around the neighborhood and call it hiking.
AB: Right. Yeah.
SC: Skiing, it's more authentic.
[Outro Music]
AB: All right, well, that's all that I have for you. This is Alyssa Burley with Rancho Mesa. Thanks for tuning in to our latest episode produced by StudioOne™. For more information, visit us at ranchomesa.com and subscribe to our weekly newsletter.
