The Rising Need for Contractors Pollution Liability

November 2023 marked the second anniversary of the Bipartisan Infrastructure Law, enacted as part of the Infrastructure Investment and Jobs Act, which allocated funding for public transportation, including investing in improving our highways, bridges, airports and ports. About $245 billion has been spent on transportation infrastructure so far, with another $346.8 billion remaining, according to Brookings Metro.^*

This public infrastructure funding has generated a lot of work for contractors throughout the country, heightening the need to ensure clients are well protected with Contractors Pollution Liability (CPL) insurance. CPL provides coverage for emergency response, cleanup costs, medical costs and legal fees if a construction firm becomes liable for sudden or gradual pollution.

Contractual Requirements Often Require Pollution Coverage

"We have seen an uptick in CPL requests," explains Sarah Wirtz, area senior vice president/Casualty manager and National Environmental practice leader at RPS.

"It's common for a contractor to carry CPL coverage as a contract requirement. CPL coverage is a cost-effective measure to help protect contractors and fill the gaps where a General Liability policy excludes pollution losses."

Contractors working on any type of roadway or bridge face various environmental exposures. Any kind of runoff or spills during transport, leaks from machinery and asphalt issues are just a few to consider when considering possible claim scenarios for contractors.

"In addition to the CPL coverage requests, we have received many requests to include Professional Liability coverage," says Wirtz. "This exposure is often incidental, as contractors abide by the contract and specs provided. We have several carriers that can offer Professional Liability coverage in conjunction with the CPL."

The Construction Industry and Sustainable Materials

The construction industry continues to look for ways to use sustainable materials, such as recycled and locally sourced materials, to reduce the environmental impact a project generates. "We have also seen an increase in energy efficiency and renewable energy opportunities," says Wirtz. "The ESG [environmental, social and governance] in construction approach to the environment is a growing sector, as society continues to become aware of the damage that historical operations caused."

Construction Labor Shortage's Impact on Risk

Wirtz explains that, unfortunately, the labor shortage in the construction industry is still very prominent.

"Unskilled workers can lead to poor quality and increased concern for loss. Hiring people with the appropriate project experience and knowledge is extremely important. With skilled employees, there's typically a reduced potential for loss, as they have the experience and expertise that helps to eliminate possible claim occurrences."

With spring around the corner, different contracting businesses will ramp up their operations. Some prevalent industries include concrete, demolition, roofing, street and road, utility, steel contractor, HVAC and swimming pool. When dealing with clients in these fields, be sure to review their pollution and professional liability exposures to ensure they have the right coverage.

"It's also important to ensure you review the Products/Completed Operations coverage under the CPL form being purchased," reminds Wirtz.

Our Contractors Pollution Liability Product

RPS's e-commerce platform makes it simple to offer CPL insurance with coverage amounts of up to $5 million.

"Agents can get quick premium indications in minutes on a project-specific and practice basis," says Wirtz.

The e-commerce platform's CPL product includes additional coverages such as Transportation Pollution Liability insurance and Completed Operations, as well as a broad definition of pollutants such as fungus, Legionnaires' disease, mold, exterior insulation finishing systems (EIFSs), asbestos, lead and silica.

In addition, crisis management services are available to assist contractors in minimizing the economic and reputational impact caused by media coverage following an occurrence. RPS also offers Incidental Contractors Professional Liability insurance through the platform.