Is Pollution Covered Under My General Liability Policy?


When a business owner asks this question after a pollution related claim, it is too late.

General liability insurance is not enough to shield your business from the exposure to pollution related claims. A “total pollution exclusion” is normal in today’s commercial general liability policy.

Pollution insurance isn’t just for hazardous waste dumps or nuclear power plants. Even the most benign businesses can carry the risk of producing, storing or emitting hazardous waste materials that cause the contamination of soil, groundwater, property, or create air-born contaminants. Any business using environmentally unsafe chemicals has an exposure. Hair salons, dry cleaners, garages, junkyards, pools, farms, and property managers using pesticides are among the many businesses who might not even realize they have an exposure.

All property owners are responsible for the condition of their property – regardless of who causes the contamination. This means you can be liable for neighbors who contaminate your land.

Decades ago, pollution was likely covered in a basic Business Owners Policy. In the 1960’s and 1970’s, the insurance industry became very concerned about the potential exposure it was facing regarding pollution liability, especially with the dangers of asbestos being brought to the public. In the mid-1980’s, standard commercial general liability policies eliminated coverage for pollution liability claims.

Luckily, pollution insurance is there to cover you for:

  • Pollution clean-up costs
  • Claims brought against your company related to pollution of property
  • Liability claims from pollution related injuries, illness or death
  • Legal defense fees associated with contaminations

Some of the factors that influence the cost of a pollution policy include:

  • Type of business
  • History of the buildings occupancy
  • Type of chemicals used
  • Disposal method of hazardous waste
  • Proximity of business to residential neighborhoods

It is important for you to have a complete understanding of you exposure to pollution related liabilities. For assistance in finding pollution insurance, contact your trusted advisors at J Krug & Associates.

Written by:
Max Katzbeck
J.Krug & Associates, Inc.
T 847-818-7518