Floyd Arthur http://carmoongroup.com http://floyd-arthur.com Environmental impairment liability insurance policies are written on a claims-made basis, which means that the polluting event must occur during the policy period for the insured to be reimbursed for its costs. However, because many such events are not detected until after the fact, policies also include a retroactive date.Claims are generally paid if: • The injury or damage occurred after the retroactive date on the policy. • The claim is made against your company while the policy was in effect. • You report the claim to the insurance company within 15 days of termination of the policy. Additionally, most insurers allow companies to buy an extended reporting option that extends the reporting period for up to 12 months. This additional reporting period prevents insurers from mitigating the cost of paying a claim by cancelling a policy after a polluting event occurs.

1. Why Contractors Need
Environmental Impairment Liability
Insurance
By Floyd Arthur
http://carmoongroup.com
http://floyd-arthur.com

2. Why Contractors Need Environmental Impairment Liability Insurance By
Floyd Arthur
• On Aug. 5, 2015, workers with the Environmental
Protection Agency entered the Gold King Mine in
Silverton, Colorado with the goal of removing and
treating contaminated water that had
accumulated in the mine shaft. Instead, they
accidentally unleashed one of the largest
environmental disasters in Colorado’s history—
releasing a toxic plume of lead, arsenic, cadmium,
beryllium and mercury into the nearby Animas
River. Within hours, the river had turned a
sickening shade of gold.

3. Why Contractors Need Environmental Impairment Liability Insurance By
Floyd Arthur
• The EPA took full responsibility for the disaster,
which spilled an estimated 3 million gallons of
contaminated water into the Animas River and
affected waterways as far away as Utah and New
Mexico. The agency quickly began a massive
cleanup effort and, within 10 days, reopened the
river and declared the water safe. The long term
effects of the spill on local residents, livestock
and groundwater will not be known for some
time.

4. Why Contractors Need Environmental Impairment Liability Insurance By
Floyd Arthur
• The EPA had the full resources of the federal
government at its disposal when its workers
accidentally let loose an environmental
catastrophe. It quickly contained the damage and
avoided (to date) regulatory penalties and a
costly lawsuit.
• Unfortunately, if you are a typical contractor, it is
highly unlikely that your firm would fare as well if
something of this nature were to happen on your
watch.

5. Why Contractors Need Environmental Impairment Liability Insurance By
Floyd Arthur
• How Environmental Impairment Liability
Insurance Protects Your Firm
•
• Environmental impairment liability insurance is a
type of insurance policy designed for companies
that work with, store or have the potential to
come in contact with hazardous substances that
can harm the environment. There are two basic
types of environmental impairment liability
insurance:

6. Why Contractors Need Environmental Impairment Liability Insurance By
Floyd Arthur
• Premises environmental impairment liability
insurance: This coverage is designed for
property owners and location-specific hazards,
such as a waste facility that stores or treats
toxic, pharmaceutical or biological waste.
• Contractors environmental liability insurance:
This coverage is designed for operations-based
hazards, such as those encountered by
construction firmson job sites.

7. Why Contractors Need Environmental Impairment Liability Insurance By
Floyd Arthur
• Environmental impairment liability insurance
coverage typically extends to environmental
damage caused by the release of pollutants
such as gas, smoke, and toxic waste and
includes associated regulatory fines and
cleanup costs. Some policies also cover legal
costs, such as court costs and attorney’s fees.

8. Why Contractors Need Environmental Impairment Liability Insurance By
Floyd Arthur
• What Environmental Impairment Liability Insurance
Covers
•
• Environmental impairment liability insurance covers
personal injury and property damage caused by the
release of pollutants into the ground, water or air. This
typically includes:
• Mandated clean-up costs, such as those required by a
government agency
• Voluntary cleanup costs, if there is an imminent risk of
environmental damage or bodily harm.
• Compensatory damages awarded by the courts

9. Why Contractors Need Environmental Impairment Liability Insurance By
Floyd Arthur
• Environmental impairment liability insurance policies are
written on a claims-made basis, which means that the
polluting event must occur during the policy period for the
insured to be reimbursed for its costs. However, because
many such events are not detected until after the fact,
policies also include a retroactive date.Claims are generally
paid if:
• The injury or damage occurred after the retroactive date on
the policy.
• The claim is made against your company while the policy
was in effect.
• You report the claim to the insurance company within 15
days of termination of the policy.

10. Why Contractors Need Environmental Impairment Liability Insurance By
Floyd Arthur
• Additionally, most insurers allow companies to
buy an extended reporting option that
extends the reporting period for up to 12
months. This additional reporting period
prevents insurers from mitigating the cost of
paying a claim by cancelling a policy after a
polluting event occurs.

11. Why Contractors Need Environmental Impairment Liability Insurance By
Floyd Arthur
• What Environmental Impairment Liability Insurance
Excludes
•
• Environmental impairment liability insurance is
comprehensive coverage, but it does not apply to every
event. For example, many insurers specifically exclude
coverage for property damage or bodily harm caused
by “naturally occurring substances,” such as arsenic,
lead, mercury and silica, if they occur in their
“unaltered form.”Other policies exclude damages that
result from exposure to fungi, including mold, and
bacteria.

12. Why Contractors Need Environmental Impairment Liability Insurance By
Floyd Arthur
Additionally, environmental impairment liability
insurance typically excludes coverage in the event
that:
• The damage was intentional or should have been
anticipated by the insured
• The damage occurred due to malicious or
unlawful acts by the insured
• The damage was to the insured’s property
• The incident resulted in bodily injury to an
employee of the insured

13. Why Contractors Need Environmental Impairment Liability Insurance By
Floyd Arthur
If you are a contractor, don’t assume that your
commercial general liability coverage is enough to
protect your company in the event you accidentally
pollute or damage the environment. Further, don’t
make the mistake or thinking that all environmental
impairment liability policies are alike. Talk to one of our
business insurance experts to get a thorough
assessment of your company’s risk. Just call 516-292-
3780 to set up an appointment for your insurance
review, or request a free consultation online now.
http://carmoongroup.com and http://floyd-arthur.com