Insuring construction pollution risk

The U.S. Environmental Protection Agency(EPA) has ranked the construction industry as one of the major sectors with the highest polluting prospective. Statistical data proves that construction related activities cause pollution-related risks to general citizens, traders, subcontractors, architects, engineers and project owners.

Pollution events can ruin ongoing projects and generate substantial losses such as property destruction claims, physical injury, cleaning costs and defense costs. Major losses may include charges and penalties, and cost overruns due to project delays. Correspondingly firms involved in any aspect of designing, construction management or providing legal advice can be held lawfully liable for losses, including pollution losses, rising from faults or slips in the execution of professional services.

Most of the professional liability policies contain comprehensive pollution exclusions. These policies are misused by the flexible insurance solutions available to address the pollution risks. First of all, the construction companies must understand the nature of the pollution exposures they may face.

Pollution risks caused by construction industry:

• Release of hazardous chemicals stored and used at a job site, such as fuel, finishers, sealers,solvents and curing compounds.
• Contact with hazardous materials such as asbestos, fiberglass, firing materials, light fixtures containing lead paint and mercury (including consequences of insufficient ventilation or inattentive hand line, etc.)
• Liability for water infection, infiltration, issues due to dampness and mold contamination of buildings.
• Aggravation of existing contamination conditions results in disturbing/ remobilizing contaminants and affecting the surrounding environment.
• Storm water and silt run-off from project sites leads to blockage and causes water infections.
• Unintended disturbance of underground pipelines or tanks causing release of hazardous waste.