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Environmental Insurance

Environmental Insurance provided by Hecht-Stout Insurance Agency

Today, greater risk exposure is coming from environmental liabilities that are likely not insured under standard liability insurance and property programs. Talk to us to know where your environmental liability may be and how to mitigate the exposures and close coverage gaps.

What is Environmental Insurance?

Environmental insurance (also known as pollution insurance or pollution coverage) provides coverage for loss or damages resulting from unexpected releases of pollutants typically excluded in general liability and property insurance policies. The losses or damages covered by environmental insurance usually arise in the form of claims against insureds for bodily injury, property damage, cleanup costs, and business interruption.

Standard general liability and property insurance policies exclude most losses connected to pollution with very few exceptions such as from smoke from an out-of-control fire or fumes from a faulty heating or air-conditioning system.

What does Environmental Insurance cover?

Genuine environmental insurance needs to have an insuring agreement that provides specific coverage for losses arising from the release or escape of pollutants. At a minimum, the insurance coverage will apply to losses arising from:

  • Bodily injury (mirrors and sometimes enhances the definition used in the general liability (GL) policy)
  • Property damage (mirrors and sometimes enhances the definition used in the GL policy)
  • Cleanup expenses (usually as required by environmental laws with available enhancements by class of business)
  • Defenses costs (usually included within the limit of liability)

Common optional coverages include:

  • Non-owned waste disposal sites
  • Transportation of pollutants as cargo
  • Business interruption
  • Loss of rents
  • Extra expense
  • Reputational damage
  • Midnight dumping on insured locations
  • Coverage for fungi/bacteria as defined pollutants
  • Amended definitions of cleanup costs for contaminates that are not regulated as hazardous materials (fungi/bacteria)
  • Reputational damages

Why a business needs Environmental Insurance

Most businesses have general liability that protects them against claims of slander, libel, bodily injury, and property damage. What general liability does not protect your business from is a scenario where it accidently exposes customers or the environment to pollutants. The costs of pollution as a negative externality can be quite high for a business. There is the ethical cost of endangering people’s lives, but this also comes with legal and monetary costs. Environmental liability can protect your company from the high fees of clean ups, law suits, and other costs that pollution related accidents have.

Shifting coverage for pollution losses from the standard GL policy to the environmental liability policy has marked a significant change in commercial insurance over the past forty years, with the change attributable both to America’s growing sensitivity to environmental concerns and insurers’ growing understanding of the potential exposure. Talk to us to know more about Environmental Insurance

Already have Environmental Insurance? Switching is easy

It might be time to switch insurers whenever the service that your existing insurer provides doesn’t meet your needs. For example, if you have a poor claims experience or an unexplained rate increase, it might be time to consider other options

If you cancel a previous policy before a new policy is effective, you could run into some serious financial problems.

Contact us today to help you with multiple options to choose from.

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