Contractors

Drilling (Environmental)

Environmental drilling covers various environmental and geotechnical drilling services, including installing groundwater and vapor wells, direct push sampling, and groundwater monitoring. It can be used to collect soil or groundwater samples to test for contamination or when monitoring or remediation wells are required to treat groundwater. Environmental exposure at a jobsite can include spreading, collecting, and disposing of pre-existing contamination and striking underground utilities or unknown hazards. Materials such as drilling fluids or grout and cement can contain hazardous materials, and their use or mishandling could result in the migration of contaminants. Improper containment and disposal of cutting wastes and decontamination wastewater could lead to environmental cleanup liability.

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Environmental Exposures May Include:

Pre-existing Contamination
Decontamination
Drilling Fluids
Heavy Metals and Solvents
Underground Utilities
Equipment Fluid Leaks
Silt and Sediment
Grout Seal Failures
Concrete Washout Water

Pre-existing Contamination

Environmental drilling may be conducted through pre-existing contamination, known or unknown, spreading contamination to previously uncontaminated soil and groundwater. Contamination can be introduced into a deeper aquifer by drilling through a perched contaminated aquifer or by improper installation of wells between these zones. Pre-existing contaminants in soil can be spread from the source area to new locations in subsurface soil or be brought up to the surface and placed on-site. Contaminated soils may also be transported and hauled to a disposal site.

Decontamination

Decontamination procedures are used to remove or neutralize contaminants that have accumulated on personnel, tools, and equipment. Decontamination generates wastewater that contains cleaners, detergents, and the removed contaminants. Containment breaches, decontamination pad leaks, or a release during wastewater pumping can allow run-off to leach into the soil or migrate off-site, impacting adjacent properties, stormwater drains, and nearby surface waters. Insufficient decontamination of tools and equipment could also cause inadvertent cross-contamination between drilling locations.

Drilling Fluids

Drilling fluids may contain various additives to help cool and lubricate drills, aid in the flotation of drill cuttings, seal porous layers of the drilling area, and more. These compounds can be toxic, especially to aquatic systems and other natural resources. Drilling fluids could contaminate or cross-contaminate groundwater and aquifer materials. A containment breach or spill could also occur while storing and transporting additives, base fluids, and premixed fluids. Releases can migrate or be carried off-site by stormwater run-off, impacting adjacent properties, stormwater drains, and surface waters. Disposal of spent drilling fluids could result in liquid waste migration from the disposal site.

Heavy Metals and Solvents

Waste cuttings may contain contaminated materials such as heavy metals, hydrocarbons, chlorinated solvents, nitrates, and traces of radioactive elements. Improper containment, labeling, testing, and waste disposal can result in environmental liability.

Underground Utilities

Underground utilities, like gas lines, water and sewage pipes, and unknown hazards, such as abandoned storage and septic tanks, can be impacted. A puncture can release fuel oil, chemicals, toxic gases, or sewage that can contaminate soil and groundwater and release hazardous air emissions, resulting in cleanup costs, bodily injury, and third-party property damage claims.

Equipment Fluid Leaks

Heavy equipment and portable refueling tanks may be brought to and stored on the jobsite. Release of fuels, lubricant oils, and chemicals from accidental spills, leaks, or vandalism can discharge pollutants into the soil and groundwater, collect in stormwater run-off, and discharge into water systems.

Silt and Sediment

Most earthwork activities in construction require silt and erosion control. Silt and sediment are fine-grained soil particles readily carried in surface run-off. Improper erosion control or handling of sediment-laden water can lead to surface run-off that can impair the functionality of stormwater drainage systems and catch basins, severely damage water quality, and threaten aquatic systems and drinking water sources.

Grout Seal Failures

Cement and grouts may be used in drilling wells or decommissioning processes. Improper application of grout and cement in the well can impact the seal layer. A faulty or leaky seal layer can allow grout and cement to enter the gravel pack or permit the migration of other contaminants. Working with concrete, cement, and numerous types of clay can also create exposure to disease-causing respirable crystalline silica. Releases may occur through transporting, handling, and mixing dry materials or grinding, cutting, or blasting. Any dry emissions generate potential inhalation exposures and may migrate off-site with wind currents.

Concrete Washout Water

Concrete washout water contains toxic materials and is caustic and corrosive. Improper concrete washouts from cleaning pumps, hoses, and drill rods can leach into soil and groundwater or run off-site and into storm drains that discharge into surface waters and significantly damage natural resources and aquatic life.

Contractors Pollution Liability Can Provide Coverage For

Contracting operations completed “by or on behalf of” the insured

Contracting operations performed at a jobsite

Third-party claims for bodily injury and property damage

Third-party claims for cleanup

Defense of third-party claims

First-party emergency response costs

Sudden and accidental coverage for owned/leased locations

Mold, legionella, bacteria, and fungi

First and third-party transportation pollution liability

Loading and unloading

Natural resource damage

Crisis/publicity management

Silt and sedimentation

Lead and asbestos

Non-owned disposal sites

Claims Scenarios & Examples

A hollow-stem auger was used for soil and groundwater sampling at the property. A sewer line was not marked before drilling, and the drilling contractor damaged the line, causing the release of raw sewage into both the soil and groundwater. The clean-up included the excavation of several tons of impacted soil and caused several nearby businesses to be shut down for a few days after their basements were filled with sewage. Substantial claims for business interruption and clean-up costs were filed.
Drilling fluid and mud spilled and broke through the containment area while a contractor transferred them into a tank. The property owner sued the contractor for the cleanup, and the contractor filed the claim with their general liability carrier, which was denied due to the policy’s pollution exclusion.
During a soil and groundwater investigation at a gasoline station, a drilling contractor hit a product line while advancing one of the borings between the dispenser islands and the underground storage tanks. A release of fuel occurred that impacted soil and groundwater.
An environmental lawsuit was filed against a drilling contractor for introducing contamination from perched groundwater into the underlying groundwater aquifer. Nearby residents were on well supply, and drinking water was allegedly contaminated, affecting their health and property value. They sought environmental cleanup, medical monitoring, and coverage for damages.
During an extensive site investigation, groundwater monitoring well development water was pumped into an on-site frac tank for storage. The frac tank developed a leak that went unnoticed for several days. Impacted groundwater stored in the tank migrated to a nearby storm drain and was discharged to a creek. Cleanup and natural resource damage claims were filed against the drilling contractor.
A drilling contractor failed to follow an engineer’s instruction and drilled beyond the required depth, hitting and damaging a natural gas line. An explosion occurred that injured nearby bystanders and damaged adjacent property. The drilling contractor was sued for bodily injury and property damage.

Final Consideration

As a contractor you can be faced with the cost to defend yourself against allegations or legal action from pollution related events, regardless if you are at fault or not. Having the proper insurance coverage in place will help fund the expenses incurred to investigate or defend against a claim or suit and provide you with environmental claims handling expertise.

Disclaimer

This environmental risk overview offers a general understanding of potential risks and may not reflect all risks associated with your business. Environmental Risk Professionals has compiled this overview for informational purposes only. This overview does not constitute legal opinion or advice, nor does it establish a consultant-client relationship. This overview is not intended to guide project parties in interpreting specific contracts or resolving disputes; such decisions may require consultation with counsel and depend on various factors. © 2025 Environmental Risk Professionals, LLC

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