Do You Need an Environmental Pollution Policy?

While the BP / Gulf oil spill financial costs are being added up a business owner needs to think seriously about the exposure and financial risks. The media is filled with articles about legislation that’s designed to reduce the impact of environmental pollution.

Unfortunately, the media tends to focus on the impact on large corporations, leaving many small-business owners under the mistaken impression that environmental pollution risk is nothing they need to think about. However, the actual situation is much more complex.

Pollution liability is a growing concern for business owners of all sizes. From contractors to industrial manufacturing, your business could be at greater liability risk than you ever imagined.

An environmental pollution policy helps protect against a wide range of potential issues, including bodily injury and property damage as well as remediation costs both on a primary site and off-site or non-owned locations.

Environmental pollution protection can be purchased as a primary policy, a rider on another policy, per project or on a multiyear basis. Other popular options include the ability to protect against completed projects or projects in operation as well as owner-controlled or prime contractor/sub-contractor options.

There are many situations – both known and unknown – where a small-business owner may need an environmental pollution policy. One example could be when a company-provided vehicle spills hazardous materials and contaminates the surrounding area. Another could be when a builder inadvertently installs toxin-containing materials in new construction, leading to serious illness or injury among the occupants. Whatever the source, environmental pollution insurance is increasingly viewed as a valuable addition for transportation providers, including truckers, shippers, air and sea cargo vendors, construction industry professionals, manufacturing plants both small and large, disposal vendors, chemical suppliers and service industry providers.

The advantages of obtaining an environmental pollution policy go beyond the obvious risk factors. It’s an increasingly common option used by owners of businesses of all sizes to help reduce risk when purchasing a new property or business, obtaining funding or even attracting top talent.

For example, in most instances the directors’ and officers’ liability insurance will not cover litigation arising from environmental conditions. The addition of pollution insurance can dramatically reduce the uncertainty surrounding serving on the board of a growing company. Likewise, the purchase of a new business property or concern is an exciting time, but it also requires a leap of faith as the buyer is usually required to assume the environmental concerns – both on-site and off-site – of the acquired company.

The addition of environmental pollution protection is a great sales tool and also provides an increased level of protection against financial uncertainty.