Source: https://www.greatamericaninsurancegroup.com, Environmental Insider, January 2019
By: Jillian Walsh
With the potential for a multi-trillion dollar infrastructure bill on the horizon, the demand for asphalt paving projects is expected to increase as the nation’s infrastructure undergoes upgrades, improvements and new construction. Often an increase in workload results in increased potential for accidents and associated environmental liability exposures. Environmental incidents associated with infrastructure projects can lead to extensive cleanup costs, legal expenses, and possible fines incurred from state or federal regulatory agencies. Fortunately, with proper insurance protection, many of these exposures can be mitigated. Great American’s Contracting Services Environmental Liability insurance policy, also known as the CSE form, offers the coverage contractors need to reduce liability and to protect their bottom line.
With more than ten years in the industry, we have the experience and expertise to offer best-in-class programs and service. Our specialized team can help brokers and their clients uncover hidden exposures, which may include…
Asphalt batch plants have considerable pollution exposures, especially if pollutants migrate offsite to nearby properties and sensitive receptors. Asphalt is comprised mainly of aggregate and viscous petroleum. The petroleum can escape from on-site tanks and cause a pollution condition. Improper operation of the asphalt tanks can lead to fatal fires and explosions. These events can release pollutants including toxic fumes. Additionally, facilities with on-site fleet vehicle fueling have increased risk of petroleum release. Even a baseless odor complaint from a neighbor can lead to legal fees and reputation damage. Offsite sudden and accidental exposures can be covered by our CSE form, and our Premises Environmental Liability Insurance (PRE) product can offer more extensive site coverage.
At job sites, grading and paving work can cause a multitude of pollution conditions. Asphalt runoff into creeks or other sensitive areas has resulted in numerous large cleanup events. If not properly executed, contractors may rupture unmarked subsurface tanks, sewers, or pipelines during grading and paving work. Dry conditions at the site may cause fugitive dust to blow into residential neighborhoods. Precipitation could cause silt and sediment to runoff into a nearby body of water.
Both the PRE site pollution and CSE contractor’s liability policies include transportation coverage to or from a covered location or jobsite. When asphalt is transferred from a batch plant to a job site, the potential exists for a traffic accident, which could result in a release from an asphalt or petroleum tanker. In addition to the clean-up costs, chemical releases from a spill near sensitive receptors can lead to significant third party damage claims and civil fines from regulatory agencies.
In addition to the expected increase in infrastructure work, there has been a noticeable increase in contracts, especially from government entities requiring environmental liability coverage. Asphalt plants, grading, and paving contractors have no shortage of exposures – any of which could cause a massive hit to a company’s bottom line. With the added protection of a Great American Environmental liability policy, a $25,000 self-insured retention could potentially replace a $1,000,000 loss.