Casualty Branch Manager / Area SVP / Environmental Practice Leader
- Chicago, IL
The Bipartisan Infrastructure Law is bringing a construction boom, making it essential that construction companies have adequate liability coverage — including Contractors Pollution Liability insurance.
The Bipartisan Infrastructure Law and its massive funding mean infrastructure projects involving highways, bridges, freight, ports, passenger rails, public transportation, and utilities are underway or set to begin across the country.
It's great news for the construction industry, providing contractors with many opportunities for work. And new jobs mean it's time to make sure coverages are in line.
"It's critical that agents and brokers review the nature of each project with their construction clients so they understand their risks and exposures. Agents and brokers want to ensure that clients have adequate coverage, whether the insured is the general contractor or a subcontractor on the project," says Sarah Wirtz, area senior vice president/casualty manager and National Environmental practice leader at RPS.
One of the most important coverages to review is Contractors Pollution Liability (CPL). CPL insurance provides third-party bodily injury, property damage and remediation costs associated with a covered pollution event at a client's job site.
Exposures for contractors could include spreading contaminants from excavation, fuel, or chemical spills in soil that's brought to project sites; accidental exposure to contaminants or pollutants in surface water or wetlands from excavation or drilling; HVAC construction or maintenance errors that release airborne bacteria or mold indoors; the release of asbestos into the air; and others.
"Some contractors may forgo CPL coverage, while others purchase a policy — either a practice- or project-based policy," Wirtz explains. "If a contractor purchased a specific project-based policy, make sure the client knows that any new projects must be added for coverage to respond."
She continues, "Even a contractor with practice-based coverage, which is rated to cover all contracting exposure revenue, may need to add dedicated limits for a project when required by contract. It's important to review the contractual agreement with the contractor to ensure the proper coverage and limits are in place."
Brownfield redevelopment — development of an abandoned property — is another exposure that contractors may face. The discovery of contamination during redevelopment, the aggravation of existing contamination by a consultant or contractor on the site or possibly on adjacent properties, or the spread of the existing contamination during the remediation can all lead to significant costs for the insured if the proper coverage isn't in place.
"Some carriers will add coverage restrictions and exclusions for brownfield redevelopment," says Wirtz, "So, again, it's always important to understand what the project is, its location and what was located on the site before redevelopment to prevent and mitigate risks and procure the proper coverages."
It's also important for general contractors to hire skilled, reputable and professional labor.
"Subcontractors who don't have the skill in a certain trade can be detrimental to a project and add to a general contractor's exposure," warns Wirtz.
As municipalities and stakeholders aim to reduce emissions, improve project sustainability, mitigate climate change and boost investor stability, the construction industry is increasingly being required to implement environmental, social and governance (ESG) programs and metrics.
ESG policies and strategies are now mandated in many projects, and you should discuss them with your contractor clients.
RPS's e-commerce platform makes it simple to provide CPL insurance with limits of up to $5 million.
"Agents can get quick premium indications in minutes on a project-specific and practice basis," Wirtz says.
The e-commerce platform's CPL product includes enhanced coverages such as Transportation Pollution Liability insurance and Completed Operations, as well as a broad definition of pollutants that includes fungus, Legionnaires' disease, mold, exterior insulation finishing systems (EIFSs), asbestos, lead and silica. In addition, crisis management assistance is available to help contractors minimize the economic and reputational harm caused by negative media coverage following an incident.
"We also provide Incidental Contractors' Professional Liability insurance on the platform. Some contractual agreements require this coverage, as contractors are frequently responsible for executing project plans rather than designing or developing them," Wirtz explains.
For limits higher than $5 million, RPS provides other CPL solutions.
As spring approaches and your construction clients ramp up, be sure to touch base and ensure you've reviewed every upcoming project with them. Having proper coverages in place, including Contractors Pollution Liability, means contractors can focus on the job at hand, instead of the risks.