No matter the industry or scope of work, contractors face pollution risks daily. Whether a spill happens suddenly or develops gradually over time, one pollution incident can cause massive financial damage and ruin a company’s reputation.
Unfortunately, many contractors mistakenly believe that their Commercial General Liability (CGL) policies will protect them. The reality is most CGL policies have pollution exclusions, meaning contractors could be left paying for cleanup, legal fees, and damages out of pocket.
That’s why more contractors are turning to Contractors Pollution Liability (CPL) insurance.
What CPL Insurance Covers
CPL insurance is designed to provide third-party coverage for:
- Bodily injury and property damage
- Defense costs and legal fees
- Cleanup expenses for sudden or gradual pollution incidents
It’s a versatile policy that can be tailored to fit different types of contracting operations, including construction firms and environmental remediation companies. CPL can be written on a claims-made or occurrence basis and can apply to individual projects or blanket coverage for ongoing operations.
Pollution Risks You Might Not Expect
Even if your work doesn’t seem “hazardous,” pollution incidents can arise from:
- Fuel leaks from equipment
- Improper disposal of construction debris
- Contamination during site work or renovations
Many CPL policies also cover civil fines, penalties, and punitive damages related to pollution incidents, something not covered by standard CGL policies.
Why a Standard CGL Isn’t Enough
Most CGL policies include either an absolute pollution exclusion or a total pollution exclusion, significantly limiting coverage for pollution-related claims. Even minor pollution events can be classified outside your CGL protection, making CPL insurance essential for contractors who want complete protection.
Meeting Contractual Requirements
In today’s market, many project owners and general contractors require contractors to carry their own pollution coverage as part of the bidding process. Having a strong CPL policy can give you a competitive edge when pursuing new projects.
Conclusion
Environmental risks aren’t going away and neither are the financial consequences of pollution events. A Contractors Pollution Liability policy helps you protect your business, your reputation, and your future.
Need help finding the right CPL coverage for your operations? Contact McHugh Insurance Group today.