Rancho Mesa's Alyssa Burley and Account Executive Kevin Howard discuss the critical role of pollution liability insurance for mechanical contractors.

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Director/Host: ⁠Alyssa Burley⁠

Guest: ⁠Kevin Howard⁠

Producer/Editor: ⁠Megan Lockhart⁠

Music: "Home" by JHS Pedals, “News Room News” by Spence

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Transcript

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 Kevin Howard, account executive with Rancho Mesa. He specializes in providing insurance for the construction industry. Today, we're going to discuss the critical role of pollution liability insurance for mechanical contractors.

Kevin, welcome to the show.

Kevin Howard: Thanks for having me. I'm excited.

AB: Now, mechanical contractors that provide heating, ventilation and air conditioning are essential to making sure that buildings around the globe have controlled temperatures and are energy efficient. Like with many trades, demand for these types of contractors continues to increase as experienced techs are retiring and that they aren't being replaced at the same rate with new employees hoping to start their career in HVAC.

So Kevin, why is pollution liability insurance important for mechanical contractors to have when they're typically working inside buildings?

KH: Great question. With the high demand for HVAC, mechanical contractors, they're moving fast, they're dealing with a lot of pollutants. There's refrigerants gases, flammable liquids, lubricants. There's an exposure there. These refrigerants are liquids or pollutants could leak into the main groundwater that could affect a nearby body of water wildlife. These types of claims can be severe in the form of clean up, fines, so many different things. Imagine the attorney fees that could come with a claim having to do with something that's been leaking for days, weeks, months. So it's really important and I'm sure every HVAC contractor listening could say, yeah, I can see that happening.

AB: Mm hmm. So, is pollution liability coverage something that's typically included in general liability policies, or is it actually a separate standalone policy that these contractors are going to need?

KH: It's really important to note that general liability policies cover bodily injury, property damage, and they exclude pollution. And there's a total pollution exclusion in every general liability policy. That could be something that is maybe assumed, like, hey, I have general liability is going to cover me for that type of a claim. It's very important to note that pollution liability needs to be carved out, purchased separately, à la carte, if you will. So, that's a real main reason for this article, this podcast is to bring awareness that you do have to go out and purchase that on your own.

AB: Alright. So can you give us an example of a pollution claim that a mechanical contractor might experience?

KH: Yeah, let's say a HPC contractor's hired to install a unit on top of a commercial building. There's some refrigerant that's, you know, slowly leaking out of that unit. It's getting into the ground. It needs attention, but nobody knows it. And it makes its way into the groundwater system, which can affect wildlife, could affect, you know, the main drain. There's so many different factors that that could end up, you know, affecting. There's going to be a need for immediate attention as far as the cleanup. There could be some legality where, hey, we have to get an attorney. So, all of these different exposures and things that, you know, you could potentially take on uninsured could add up to a pretty big number, right?

AB: Absolutely.

KH: I mean, that's a prime example of why you would definitely want to file an insurance claim, have your insurance carrier step in that specific handles this type of claim. You know, that's what they're meant for.

AB: Right. So are there other scenarios that could be a potential pollution claim?

Yeah, let's switch over to the residential HVAC mechanical contractor. If there's a ground unit, for example, that needs to be installed and there's some drilling involved, there could be an incident where a fuel tank that's underground is not marked, it's drilled into and there's gas leaking. That gas is a hazard to anybody breathing in that—

AB: –breathing in those fumes.

KH: Yeah, breathing in those fumes. There definitely needs to be a plan to react and, you know, get a cleanup going, stop the leak. All of these things cost money and could create a potential, you know, pretty, another big number, right? You know, what are we talking 20, 30, 40 – who knows how large this claim or how severe this claim could get and needs immediate attention. If you don't have a pollution policy, what are you – you know, who do you who do you call? What's that first call? You know, do you call hazmat? You know, that's another point of this is you have an action plan because you've purchased a commercial pollution insurance policy to come in and handle this type of claim.

AB: That's a great point, because a lot of companies may not know what to do. So if they know that they can call their insurance carrier and say, hey, I've got this problem, now the experts are on it. So, what do you recommend mechanical contractors do if they're not sure if they have or need a pollution policy?

KH: Yeah. Number one, ask your insurance agent or look through your policies. Bring that question to the table. Do we have commercial air pollution? Is that excluded on our general liability policy? How much does it cost? I will say that pound for pound, commercial air pollution liability is one of the least expensive policies compared to other types of insurance. It hasn't really been affected by the ups and downs of our market. It's been pretty, you know, pretty static as far as the cost per $1 million. You'd be surprised. It's really not that expensive, and it should be purchased, in my opinion, by every HVAC mechanical contractor.

AB: Yeah, I agree. So, Kevin, if listeners have questions about their coverage or risk management strategies, what's the best way to get in touch with you?

KH: Yeah, I can be reached by email khoward@ranchomesa.com. I have a direct line which is (619) 438-6874. And you know, please reach out. I'm here to answer any questions.

AB: All right. Well, Kevin, thank you so much for joining me in StudioOne.

KH: Thank you so much. Have a great day.

AB: This Alyssa Burley with Rancho Mesa. Thanks for tuning into our latest episode produced by StudioOne. For more information, visit us at ranchomesa.com and subscribe to our weekly newsletter.