Error Omissions
Error Omissions
Submit your information below so we can contact you with a FREE quote
[All fields are required.]
Actual Annual Revenue:
Verify:
=
I have read and agreed to theTerms & Conditions
Error Omissions
Error Omissions

Insurance Agency E&O: The Importance of Reviewing Pollution Liability Exposures

Insurance Agency E&O The Importance of Reviewing Pollution Liability ExposuresEnvironmental Risks for Real Estate & Construction Industries Require Securing Specialized Coverages for Clients

Companies and organizations across all industry sectors are taking initiatives to green their properties and operations. It makes good business sense as increasingly more consumers are looking at a corporation’s sustainability practices and carbon footprint when making purchasing decisions. It also makes good economic sense as there are gains to be realized with an energy-efficient building in addition to increased property values and the ability to attract tenants. And, of course, it’s good for the environment and the planet we call home.

Some of the green initiatives taking place come from new construction that includes the use of advanced environmentally friendly materials, innovative lighting, air filtration, reusable water, etc. Other initiatives are as result of sustainable renovations or “green makeovers” to office complexes, shopping centers, hotels, multi-family residences, and so on to overhaul lighting, heating, ventilation and air conditioning (HVAC), and so on.

And while these renovations toward greener buildings are a positive move, there are significant exposures that exist for property owners and contractors that need to be reviewed thoroughly to secure the proper insurance policies and implement risk-mitigation measures.

For example, airborne particulates, biological contaminants and gases can be released during the course of renovation, adversely affecting those who come into contact with these hazardous materials, including the building occupants. In fact, according to the Centers for Disease Control (CDC), particulate material such as dusts and fibers are likely to be produced during construction and renovation activities. Sources include drywall, plaster, concrete, soil, wood, masonry, flooring, roofing, and ductwork. These can exacerbate lung conditions such as asthma and chronic obstructive lung disease. Materials that contain fibers such as fiberglass composite materials or insulation can irritate the skin, eyes and respiratory tract when disbursed in the air and/or inhaled during removal. Toxic dusts containing asbestos, polychlorinated biphenyls (PCBs) or lead can cause serious long-term health effects.

These types of exposures pose liability risks for the property owner and the construction firm on the job. What’s more, a contractor can be found in violation of the Environmental Protection Agency’s (EPA) Renovation, Repair, and Painting (RRP) rule. Under this rule, contractors performing renovation, repair and painting projects that disturb lead-based paint in residential properties (including multi-family properties), child care facilities, and schools built before 1978 must be certified and follow specific work practices to prevent lead contamination. If safe work practices are not followed, contractors can be found in violation of the rule, fined and responsible for any bodily injury, property damage, and cleanup costs stemming from operations performed by the contractor or operations performed on the contractor’s behalf.

Existing buildings pose environmental risks for property owners – even when renovation or construction isn’t underway. For example, a breakdown in the heating and cooling system or water intrusion in an office building can exacerbate the risk of mold. Building dampness and mold exposure have been associated with respiratory symptoms, asthma, hypersensitivity pneumonitis, bronchitis, and respiratory infections. Apartment complexes are exposed to environmental risks that stem from underground heating oil tanks, lawn fertilizers, or other chemicals stored on site. Even pool-cleaning chemicals stored at complex can result in an unexpected environmental liability.

Moreover, property owners can face liability exposures associated with damage to neighboring properties due to activity, renovation or construction. There have been instances in which a property owner did not directly create the pollution incident itself, but faced liability and related clean-up expenses when the owner’s property was impacted by an event that occurred upstream or next door.

These are just some examples of the pollution liability risks facing real estate owners and contractors. In reviewing your insureds’ insurance program, be sure to discuss all potential environmental exposures and the need for proper Pollution Liability coverage. A standard Commercial General Liability in most cases either excludes coverage or is limited in scope and requires additional enhanced insurance or a number of specific policies, including E&O coverages, depending on the insured and the exposures.

Without the proper insurance program in place, you could find yourself in a “he-said, she-said” lawsuit if the insured claims that they weren’t advised of any policy exclusions and which policies are available to transfer risk. As with any insurance advice, it’s critical that you detail in writing your agency’s environmental insurance policy recommendations for all your clients and which were accepted and declined. In addition, be sure your firm has the right Insurance Agency Errors & Omissions policy secured with proper limits in the event of a lawsuit.

At Axis Insurance Services, LLC, we have extensive experience and knowledge and the markets to provide you with the proper insurance agent E&O policy. Please give us call at (877) 787-5258 to discuss your individual insurance program.

Comments

comments

Blogged on: August 14, 2013 by Mike Smith
Error Omissions
Error Omissions
Submit your information below so we can contact you with a FREE quote
[All fields are required.]
Actual Annual Revenue:
Verify:
=
I have read and agreed to theTerms & Conditions
Error Omissions
Error Omissions