The ongoing issues with insureds’ contract requirements force insurance professionals to push the envelope each and every day. Trying to keep up with a client’s needs can take a great deal of effort, and with pollution coverage becoming a very real issue for most business owners and operators, it is important to understand the differences in coverage forms. One major point to focus on is the important difference between Sudden & Accidental and Broad Form Contractors Pollution Liability.


Over the past twenty years, the insurance industry has provided Sudden & Accidental Pollution coverage to a variety of business classes. This coverage was meant to satisfy policy holders and property owners that were concerned with the potential for a pollution loss. Sudden & Accidental coverage is tied to a discovery and reporting period, and generally covers bodily injury and property damage caused by a pollution loss. The main issue with this fact is that if the loss happens over time or is not discovered or reported in the time allowed under the policy form, there is no coverage in place. Also, these forms tend to not have completed operations, action over, or clean-up costs included.


Over the last decade, we have all seen companies that have started to provide broad form Contractors Pollution Liability coverage to many of these same industries. The Contractors Pollution Liability form covers bodily injury, property damage, and clean up expenses. Most of these forms also include completed operations and action over coverage, allowing for a much broader policy and giving real coverage to the insureds and their certificate holders. These policies are written on a claims-made basis and the discovery and reporting period are tied to the policy term.


With the environmental departments continually growing and issues like the BP offshore incident, your insureds have a greater need to protect themselves from Pollution exposures and threats. Property owners, contract holders, and certificate requests are going to continue to ask for Pollution coverage and higher limits with broader terms. This is going to put more pressure on insurance brokers to provide for these needs and to make sure the gaps in their clients’ insurance programs are covered. This can be done with a simple standalone Contractors Pollution Liability policy that can also include Products Pollution Liability, Transportation Pollution Liability, and some Site Specific coverage.


Always remember that when your insured is on a third party’s site, they are exposed to environmental risk they may not generate. We cannot anticipate who an insured will work for or what conditions they may be dealing with in their daily operations. Accidents can happen, and with one simple insurance policy, you can remove the worry over the total or absolute pollution exclusion on the General Liability policy. We have to remember that thinking outside the box and providing expertise are the main reasons the insured pays his or her insurance agent. In order to protect both the client and the brokers organization, it is crucial to be educated on environmental exposures and the forms that address them.