Contractors

Environmental Consultants

Environmental consultants provide expertise to businesses, government agencies, and other organizations to help them understand and manage environmental issues. They work on a wide range of projects, including regulatory compliance, permitting, site investigation, due diligence, and remediation. Consultants may also be involved in renewable energy initiatives, helping to assess the environmental feasibility of wind or solar farms. Other services may include environmental audits, risk assessments, sustainability assessments, habitat restoration, or land preservation projects. While executing these services, the consultant’s role can range from being a subcontractor to the prime contractor, or vice versa. Due to the inherent nature of their work, environmental consultants face many environmental and professional exposures.

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Waste Handling

Consultants may be contracted to characterize hazardous waste streams for industrial clients. Work may include consolidating wastes into drums or containers. Leaks or spills could occur while handling these wastes resulting in soil and groundwater contamination.

Overlooked Contamination

Failing to identify recognized environmental concerns (RECs) during a Phase I Environmental Site Assessment (ESA) can have significant consequences for an environmental consultant. These consequences can affect both the consultant and the client. If a potential source of contamination is not identified during the Phase I ESA, the new property owner may have to deal with costly cleanup and remediation processes and sue the environmental consultant for damages.

Preconstruction Design Liability

Environmental consultants can be involved in preconstruction services and provide input on design/constructability, scheduling, and costs. Consultants may also modify design specifications while at the jobsite. Malfunctions arising from these inputs/changes create a direct professional responsibility for the consultant.

Subcontractor Oversight Responsibility

Proper selection and supervision of subcontractors is a professional exposure for the consultant. Consultants may have to defend themselves against claims relating to work for which they were responsible due to the hiring of the subcontractor.

Errors and Omissions

Consultants may provide design services that can result in professional liability. This may include performing all in-house design work, hiring design firms through a joint venture, or providing professional opinions on design aspects. Errors and omissions can result in time delays, budget overruns, and rework.

Underground Storage Tanks

Consultants working with underground storage tanks (USTs) face chemical hazards from volatile organic compounds (VOCs) like benzene from petroleum products, solvents, and soil contaminants, alongside physical risks such as confined space dangers and noise from equipment. These risks escalate during leak investigations, tank removals, or spill response. Improper training and safety measures could lead to a release of pollutants, resulting in bodily injury and property damage claims.

Waste Disposal

Soil cuttings from drilling activities and purge water from groundwater sampling activities may contain contaminated materials such as heavy metals, hydrocarbons, chlorinated solvents, nitrates, and traces of radioactive elements. Consultants may be responsible for the proper storage, handling, and disposal of these investigative-derived wastes. Improper containment, labeling, testing, and waste disposal can result in environmental liability.

Contracting operations performed “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

First and third-party transportation pollution liability

Sudden and accidental coverage for owned/leased locations

Non-owned disposal site liability

Environmental Consultants may be able to combine Commercial General Liability, Contractors Pollution Liability, and Professional Liability into one package policy. Worker’s Compensation and Auto may also be offered.

Mold, legionella, bacteria, and fungi

Lead and asbestos

Loading and unloading

Silt and sedimentation

Natural resource damage

Claims Scenarios & Examples

An environmental engineer was hired by someone looking to purchase a property to provide a Phase I and a partial Phase II environmental assessment of a 40-acre industrial parcel. The purchaser of the parcel relied upon the insured’s reports when he purchased the property; however, the engineer failed to detail groundwater issues as part of the report. After the purchase, it was determined that there was severe groundwater contamination throughout the site. The purchaser sued the environmental engineer and the former owner of the site for $2 million in damages for failure to disclose the groundwater contamination.

A consultant failed to delineate wetlands on a property that was to be developed into a new regional landfill. As a result, the landfill had to be re-engineered, delaying its opening. The settlement amounted to $7 million.

When buying a property, the prospective owner enlisted an environmental consultant to conduct an environmental assessment to ensure the property was in good condition before finalizing the purchase. However, the report did not reveal the presence of a 1,000-gallon underground storage tank (UST) and the associated contamination. After the purchase was completed, the contamination was discovered. The new property owner subsequently filed a lawsuit against the consultant for the costs incurred to remove the tank and perform remediation, which amounted to $181,467.

A hazardous waste site hired a consultant to develop a health and safety plan and provide inspection services. During the site’s remediation, a subcontractor who was not equipped with proper respiratory protection died from inhalation of an unknown chemical. The family filed a claim against the consultant for improper health and safety precautionary measures and negligent oversight of the work in progress.

An environmental consultant assisted a manufacturing plant with site cleanup by hiring an environmental contractor to excavate, transport, and dispose of contaminated soil and concrete. The materials were sorted into hazardous and non-hazardous waste containers, which were then transported to the appropriate landfills—hazardous or non-hazardous. While finalizing the report, the consultant discovered that one hazardous waste container had mistakenly been sent to the non-hazardous landfill. The consultant attempted to resolve the issue, but the landfill stated that it had been too long, and the container had been buried under at least 60 feet of additional waste, making retrieval nearly impossible. The state environmental agency conducted a risk assessment, leading to a fine of over $100,000 for improper disposal of hazardous waste. The plant sued the consultant, who then took legal action against the contractor to recover the costs of the fine and legal fees.