What do environmental insurance policies cover?
Environmental insurance policies protect you against financial loss arising from pollution. In general, if a loss occurs that is due to pollution, the policy will pay:
- Cleanup costs at or emanating from the insured location
- Bodily injury and property damage claims
- Legal defense expense and non-criminal fines and penalties
A pollution policy is specifically designed to accommodate the environmental risks related to a wide array of industry sectors including real estate, manufacturing, and agriculture. Coverage options are also available for business interruption and or loss of property value.
What is the coverage trigger?
The environmental policy coverage is triggered when a previously unknown pollution condition is first discovered during the policy term. Provided the pollution was unknown before the policy went into effect, clean-up coverage applies even if the pollution actually occurred before the policy was effective.
Will I be required to conduct environmental assessments in order to secure coverage?
The insurance carrier conducts its own due diligence by utilizing its in-house engineering staff to research database records and/or conduct telephone surveys with the insured. Site surveys by the carrier are possible but normally do not occur.
In the event environmental assessment reports have been prepared, the carrier does require those reports be submitted with the application for their review.
Is coverage available for mold contamination?
Mold contamination is one of the most serious environmental risks facing the commercial and residential real estate industry. Due to the increasing volume of these lawsuits, coverage for claims arising from mold (microbiological matter) is typically excluded from general property insurance. However, environmental insurance policies may insure against mold-related claims.
Full coverage may be obtained when the applicant completes a Mold Questionnaire that is subject to approval by underwriters, who will then calculate an additional premium for adding the coverage.
Are underground storage tanks covered?
Underground storage tanks (e.g.10% or more of the tank is buried in the ground) are specifically listed and insured on the policy. Certain requirements apply to have these tanks covered, such as testing of tanks which are more than 10 years old and a complete description of the size, age and contents of each tank.
Above ground storage tanks (including in basements and vaults) are automatically covered and do not have to be listed on the insurance policy.
Contact a HUB Environmental Insurance advisor today.