Pollution exclusion claim examples

When is pollution excluded and when is it not? Your Commercial General Liability insurance policy for your business will most likely have a pollution exclusion in the wordings.

The adjuster first looks at the wordings of the policy to determine if a claim will be paid. So if you have an exclusion that applies to that particular situation then you are on your own. You will have to find other means to deal with the impact of such a financial loss.

Turners Tips advises that each case needs to be considered under the specific way the policy is worded and then it can be decided whether or not the insurance company helps with the costs if there is a claim.

If your business deals with fuel or fuel storage then you can readily see that there could be a situation where pollution of the environment could occur. What if one of your tanks rusts and develops a leak? Your costs to clean up and restore the land back to the prior condition would not be paid under your insurance. Consider the impact if this leak gets into water and the pollution rapidly spreads.

Waste products are something that will not be considered. It does not matter how the person or property was injured. Waste products are an absolute exclusion. So if you operate a landfill then you need to consider buying separate insurance to address your environmental concerns.

If you own an apartment building or commercial complex then you could have a valid claim if the problem is a faulty furnace which makes the tenants sick from inhaling the carbon monoxide.

It is important to remember that your policy will have an "aggregate" limit. This limit is the most that will be paid out under the policy so do think about how much insurance your business might need in some of these circumstances.

Here are some other situations that bring the insurance company into paying pollution claims include:

Owner as Additional Insured Exception

Hostile Fire Exception

Away From Your Premises Exclusion

Mobile Equipment Exception

Take control of your insurance. Turners Tips strongly recommends that you sit down with your agent or broker and discuss what situations could happen as a result of your on-going operations. What coverage do you have now? What could you buy to add to this? You need to understand the financial risk you undertake when you choose not to insure for a loss that could not only stop your profitability but prevent your business from continuing into the future.