Pollution-Related Claim Situations
Pollution liability insurance protects you if your chemicals cause pollution-related bodily injury or property damage.
- Chemicals stored in underground tanks leak into soil, affecting groundwater and agriculture.
- Airborne emissions rise above EPA-approved levels and result in penalties or fines.
Chemical manufacturers often combine the GL and pollution coverages into one policy, thus avoiding coverage gaps. We highly encourage all the chemical product business we work with to follow this rule of thumb.
Dive deeper into pollution liability insurance. Check out the article below.
Pollution Liability – 5 unique characteristics
Of the coverages for chemical businesses, pollution liability may be the most unique and most difficult to define. It begs questions such as…
What event triggers a claim?
Regarding airborne pollution, how do you determine the cause-and-effect relationship?
When does the company face a ‘strict liability’ exposure?
Below outlines 5 unique and fundamental traits that characterize environmental loss exposures, and how they specifically relate to the chemical industry:
- Environmental loss exposures are difficult to identify and measure because they arise from past activities: An adjuster or an environmental agency has a hard time quantifying a chemical pollution claim occurring in prior years. When precisely did the pollution begin? Were there activities that, over time, increased or decreased the pollutant release?
- Lack of cause-and-effect relationships make causation and liability hard to establish: A person might living near a chemical plant might contract a disease that can be linked to factory emission. Is that enough to hold the manufacturer liable? Are there other links within that persons lifestyle or genetics to the contracted disease?
- Claims may arise from perceived exposures or from fear of future injury: If a plaintiff successfully settles for alleged injury related to the chemical product, another patron could easily take the same course of action.
- Environmental laws impose strict liability and multiple damages: Even if no bodily injury or property damage occurs, a chemical producer could get in trouble with an environmental agency. Enforcing environmental laws could lead to penalties, fines, or hefty cleanup costs.
- Damage increases over time as contamination spreads: If a chemical disperses in soil, groundwater, or running water, the damage will increase as the substance influences a greater geographic area. Hence, a claim scenario intensifies as time goes by.