12 Common Pollution Liability Claims Contractors Should Know

Pollution liability claims in Canada can cost a company well over $100,000. This is because incidents of pollution come with costs for cleanup, emergency response, and treatment for harmed individuals.

Pollution can come in many forms: solid, liquid, gas, or energy and can happen suddenly or gradually.

In essence, as long as people, wildlife, or ecosystems are damaged by a pollutant, the company will be held legally responsible for the incident. Contracting companies are among the entities frequently held liable for incidents of pollution.

In this article, we take a look at the 12 most common pollution liability claims that contractors face — and how pollution liability insurance can save the day.

Let’s get started!

What Is Pollution Liability?

Pollution liability occurs when a business is considered legally responsible for an incident of pollution. A wide number of contractors are susceptible to this because most contracting firms handle potential pollutants everyday.

This is why we, at KASE Insurance, recommend pollution liability insurance for the following industries, among others:

• Construction/renovation
• Paving
• Demolition
• Excavation
• Landscaping
• Plumbing
• HVAC installation
• Commercial cleaning

Examples of Pollution Liability Claims

1. Storage Tank Leaks

Underground storage tanks are typically designed to hold toxic compounds like waste oil and gasoline. Contractors who do excavation work are prone to striking these tanks and causing their contents to leak, thereby resulting in soil pollution. This happens because the exact location of these storage tanks isn’t always known.

In other cases, though the presence of the storage tank is noted by the contractor, accidents and mishandlings can still happen and lead to soil pollution.

2. Struck Natural Gas Lines

Just like underground storage tanks, underground natural gas lines can be accidentally hit by excavation equipment. This can lead to project delays and immediate potential danger to people in the surrounding area. In some cases, evacuation is necessary because fires and explosions can spark as natural gas escapes into the vicinity.

3. Spills/Accidents During Transport

A number of contractors oversee the movement of cement, fuel, and other potential pollutants. In case an accident happens during transport and the material is dumped on soil or near a body of water, this can harm local wildlife. But whether a spill occurs on the road, beside a body of water, or in any type of environment, immediate cleanup is necessary.

4. Leaks from Machinery

Another way that contractors can be susceptible to pollution liability claims is when heavy machinery springs a leak. Most construction equipment runs on diesel. Furthermore, large machinery like bulldozers can carry 79 gallons at a time. If a fuel leak goes unnoticed for a long period of time during construction, it can contribute to soil or water pollution. This incident would need immediate cleanup.

5. Herbicides, Pesticides, and Fertilizers

Contractors that handle landscaping work with herbicides, pesticides, and fertilizers on a regular basis. When used moderately, these should not impact people or the environment negatively.

However, if these chemicals are accidentally spilled in large quantities, this can be considered as an incident of pollution. Pollution liability claims involving these chemicals would need an emergency response.

6. Asphalt and Tack Coat Issues

The common theme with some of the chemical pollutants on this list is that they are typically safe with the proper use/handling and under the right circumstances. When it comes to asphalt and tack coats, though these are safe when used correctly, all it takes is an untimely and sudden rainfall to wash these chemicals into a body of water close by.

If this happens, pollution liability claims can be filed. Furthermore, emergency cleanup is necessary to prevent further harm to local flora and fauna.

7. Asbestos

Asbestos is a pollutant that demolition contractors need to be wary of. Typically, asbestos is present in old buildings. Therefore, when these are to be demolished, an asbestos cleanup must first be carried out. Otherwise, asbestos would be released into the air and could lead to respiratory health issues for the people exposed to it.

8. Dust

Pollution liability claims can be filed against construction, renovation, and demolition contractors for large amounts of unmanaged dust that their business operations produce. Wood dust, silica dust, mineral dust, and demolition dust, when mishandled and constantly released into the air, can cause a wide range of respiratory issues for people nearby. These incidents, therefore, count as pollution liability claims.

9. Project Site Run-Offs

When construction takes place near a body of water, there’s a high possibility of site run-offs. Such incidents can carry pollutants like paint, concrete, fuel, and so on. This type of pollution is likely to be gradual — but once detected, it needs immediate cleanup.

10. Mould

Contractors that carry out repairs and installations in existing structures can be held responsible for the introduction or proliferation of mould. A few examples of such contractors include waterproofers, plumbers, renovators, etc.

Though mould may seem like one of the minor pollution liability claims on this list, settlements can be high if the introduction of mould is tied to an aggravated respiratory condition or death.

11. Legionella

Legionella is a type of bacteria that inhabits water sources. Legionella leads to what’s known as Legionnaire’s disease, which can be lethal in one out of ten cases. This is why contractors that install fixtures like showerheads or appliances like HVAC systems need to be covered for legionella contamination.

12. Noise

Pollution liability claims are not limited to chemicals and pathogens. Noise can be a pollutant too. Because of this, contractors who work with loud machinery need to be careful with the amount of noise they produce and what time of day they carry out tasks — especially if the project site is near a residential area.

What Does a Pollution Insurance Policy Cover?

Pollution liability insurance covers all of the pollution liability claims that we discussed in the previous section. So if such an incident occurs and a company is found liable for it, pollution liability insurance will save the day.

This type of insurance can cover incidents of sudden or gradual pollution. Sudden pollution happens when the pollutant is immediately released by business operations such as transport, excavation, and the like. Meanwhile, gradual pollution refers to when it becomes noticeable over time. A few examples of this include mould proliferation, legionella contamination, and the slow accumulation of construction site run-off in a body of water.

Whether a business becomes liable for sudden or gradual pollution, pollution liability insurance covers the following:

• Emergency response;
• Cleanup costs;
• Medical costs; and
• Legal fees.

The amount of payout that pollution liability insurance provides depends on the set deductibles of the policy, as well as the coverage limit.

Get Customized Pollution Liability Insurance To Protect Your Business

Looking to protect your business from financial loss due to pollution liability claims? Count on KASE Insurance, an award-winning insurance brokerage firm in Toronto, to help you get pollution liability insurance tailored to your needs.

We specialize in putting together customized insurance for various businesses. Our expert team can set up pollution liability insurance that will address the unique needs of your contracting business. Furthermore, we offer the most hassle-free insurance experience yet. Hands-on assistance will be available for you in every step of the way.

Get started today by contacting our friendly team or request a FREE quote!