FAQs
Polution Insurance

Q: What is Pollution Insurance?

A: Pollution Insurance (also known as environmental insurance) provides coverage for loss or damages resulting from unexpected releases of pollutants that are excluded (or limited) in general liability and property insurance policies. The losses and damages covered apply to claims against insureds for bodily injury, property damage, pollution cleanup costs, and business interruption.

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Q: Who needs Pollution Insurance?

A: Many types of companies are capable of causing damage or injury involving incidents with contaminants. Whether you choose to obtain a Pollution Insurance policy depends on how much risk you’re willing to take.

 

Q: Does a farm need a Pollution Insurance policy and what does it cover?

A: If you own a farm, chances are an accident involving some sort of risk to the environment could arise.

 

Q: What is considered a pollutant with regards to insurance?

A: Pollutants are any materials or substances that end up somewhere they weren’t intended to be used. Things like hazardous waste is an obvious pollutant, but even things like fresh water, fruit juice, and cheese can be considered pollutants in certain instances if they cause damage or liability from a pollutant event.

 

Common pollutant examples are:

• Oil

• Gas

• Manure

• Pesticides

• PFAS chemicals

• Weed killers

• Ammonia

• Sewage

• Mold

• Category 3 water

• Carbon Monoxide

• Nitrogen dioxide

• Sulfur Dioxide

• And many more

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Q: How are prices determined for Pollution Insurance?

A: Factors in determining the cost of Pollution Insurance includes on the size of the company, the risk involved, the amount of coverage your company needs, deductibles, and whether or not you’re eligible for discounts. Annual premiums can be as little as $1,000 or as much as $100,000. Usually, insurance companies require you to pay the entire premium for Pollution Insurance policies before coverage is initiated.

 

Q: What does Pollution Insurance cover?

A: A standard Pollution Liability Insurance policy covers claims for bodily injury, property damage, business interruption, crisis management, transportation liability, as well as clean-up costs associated with the toxic materials. This means if any hazardous waste materials you work with, store, or produce caused any injuries or damage to a third party, land, or wildlife, the insurance policy would pay for the damages, medical bills, and associated legal fees.

 

Q: What might not be covered in a Pollution Insurance policy?

A: Every insurance carrier and policy may have different exclusions, so you’ll want to make sure that you are covered for whatever line of business you have. Some common exclusions are:

 

• Pollution that occurs from an intentional act

• Asbestos, lead, and mold (these might be added as a policy endorsement or under separate coverage)

• If the insured has agreed to contractual liability for certain events 

• Failure to maintain insurance (If your industry is required to retain a certain amount of liability insurance and you fail to do so, fines and penalties are not covered)

• If a pre-existing pollution involved