Subcontractor Liability
General contractors may hire subcontractors for whom they are responsible. Actions of subcontractors and hazardous material exposure can become the liability of the project general contractor. Since pollution laws are joint and several, general contractors can be held liable for more than the percentage of work they performed of the actual activity that created the loss.
Chemical and Fuel Releases
Chemical releases related to spills or leaks can contaminate soil and groundwater. Exposures can include fuel or hydraulic fluid from construction equipment or potentially toxic materials such as solvents, paints, and sealants used and stored at a jobsite. A release could contaminate run-off and migrate into storm drain systems, drinking water wells, or off-site streams and rivers, resulting in extensive cleanup liability and potential natural resource damage.
Airborne Chemical Emissions
Release of contaminants in the air, such as fumes from various chemical sources, including aerosol cans, adhesives, sealants, curing compounds, and cleaning solutions, can expose third parties to hazardous air emissions and lead to environmental tort liability.
Erosion and Sediment Runoff
Improper erosion controls for work involving the disturbance, relocation, or stockpiling of soils, such as excavating, trenching, or grading, can lead to contaminated run-off of silt and sediments, which are fine-grained soil particulates. These particulates are readily carried off from rain, accidental pipe breaks, or excessive watering from dust suppression and can impair the proper functioning of stormwater drainage systems, cause ecological damage to streams and rivers, and result in adjacent property damage.
Pre-Existing Contaminated Soil
During excavation or site preparation, pre-existing contaminated soil could be collected and spread to clean site areas or contaminate ground and surface waters.
Underground Utility Strikes
Subsurface work can impact underground utilities, like gas lines and sewage pipes, or unknown hazards, such as abandoned storage and septic tanks. Accidental puncture and release of fuel oil, chemicals, toxic gases, or sewage can contaminate soil and groundwater and release hazardous air emissions, resulting in cleanup costs and third-party bodily injury and property damage claims.
Disturbance of Hazardous Materials
Installation, demolition, and renovation can disturb existing asbestos, lead-based paint, and polychlorinated biphenyls (PCBs). Asbestos can be found in ceiling and floor tiles and wiring insulation. PCBs can be found in areas such as window caulk and light ballasts. Mold may also be disturbed where water intrusion has occurred. Improper identification and inadvertent disturbance of these materials may cause a hazardous release, leading to third-party bodily injury claims and remedial and disposal liabilities.
Moisture Intrusion and Mold Growth
Installation of some building materials, including flooring, windows, insulation, and drywall, and work on systems such as plumbing and HVAC, can generate moisture intrusion issues in the form of condensation or leaks, resulting in the growth of mold and bacteria, which pose health hazards to building occupants and can absorb into building materials creating cleanup liability.
Post-Construction Liability
Once work has been completed and put to its intended use, contractors can still be liable for pollution exposures, at least through the statute of repose, for construction defects or from products or materials installed or installed incorrectly.
Transportation-Related Exposures
Transportation creates a wide range of exposures. Spills may occur while chemicals, waste debris, raw materials, or equipment are transported to and from the jobsite or disposal facility or during loading and unloading operations. Transportation exposures may be from the insured operating their vehicles or through contingent liability through those they hire.
Improper Waste Disposal
Improper disposal of wastes can lead to cleanup costs and environmental tort liability. Materials, such as chemicals and solvents, or contaminated wastes, such as soils or asbestos-containing materials, may be classified as hazardous waste and require special disposal procedures. Businesses are required to determine whether the waste they generate is hazardous. Hazardous waste may also be inadvertently mixed with construction debris/waste and disposed of improperly. Investigations for improper disposal at a disposal facility can result in potential liability for all parties that manifested waste to the facility.
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
Natural resource damage
Sudden and accidental coverage for owned/leased location
First and third-party transportation pollution liability
First-party emergency response costs
Mold, legionella, bacteria, and fungi
Lead and asbestos
Non-owned disposal sites
Loading and unloading
Silt and sedimentation
Claims Scenarios & Examples
Unknown Soil Contaminants and Migration
During excavation or site preparation, unknown pre-existing contaminated soil could be collected and spread to clean areas of the site or contaminate ground and surface waters.
Subcontractor Vetting
Proper selection and supervision of subcontractors is a professional exposure for the contractor. Contractors may have to defend themselves against claims relating to work for which they were responsible due to the hiring of the sub.
Preconstruction Planning and Modifications
General contractors can be involved in preconstruction services and provide input on design/constructability, scheduling, and costs. Contractors may also make modifications to design specifications while at the jobsite. Malfunctions arising from these inputs/changes create a direct professional responsibility for the contractor.
Hazardous Waste Management
Improper erosion controls for work involving the disturbance, relocation, or stockpiling of soils, such as excavating, trenching, or grading, can lead to contaminated run-off of silt and sediments, which are fine-grained soil particulates. These particulates are readily carried off from rain, accidental pipe breaks, or excessive watering from dust suppression and can impair the proper functioning of stormwater drainage systems, cause ecological damage to streams and rivers, and result in adjacent property damage.
Cargo Handling and Transit
During excavation or site preparation, pre-existing contaminated soil could be collected and spread to clean site areas or contaminate ground and surface waters.
Post-Completion Pollution Hazards
Once work has been completed and put to its intended use, contractors can still be liable for pollution exposures, at least through the statute of repose, for construction defects or from products or materials installed or installed incorrectly.
Moisture Intrusion and Mold
Installation of some building materials, including flooring, windows, insulation, and drywall, and work on systems such as plumbing and HVAC, can generate moisture intrusion issues in the form of condensation or leaks. Improper design or installation of plumbing and HVAC systems or building materials, including windows, insulation, and drywall, could also result in leaks, condensation, or water intrusion into building materials. This can result in the growth of mold and bacteria, which pose health hazards to building occupants and can absorb into building materials creating cleanup liability.
Design Errors & Omissions
Contractors 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.
Legacy Contaminant Disturbance
Installation, demolition, and renovation can disturb existing asbestos, lead-based paint, and polychlorinated biphenyls (PCBs). Asbestos can be found in ceiling and floor tiles, insulation, and around wiring. PCBs can be found in areas such as window caulk and light ballasts. Mold may also be disturbed where water intrusion has occurred. Improper identification and inadvertent disturbance of these materials may cause a hazardous release, leading to third-party bodily injury claims and remedial and disposal liabilities.
Underground Utilities
Subsurface work can impact underground utilities, like gas lines and sewage pipes, or unknown hazards, such as abandoned storage and septic tanks. Accidental puncture and release of fuel oil, chemicals, toxic gases, or sewage can contaminate soil and groundwater and release hazardous air emissions, resulting in cleanup costs and third-party bodily injury and property damage claims.
Erosion Control and Run-off
Improper erosion controls for work involving the disturbance, relocation, or stockpiling of soils, such as excavating, trenching, or grading, can lead to contaminated run-off of silt and sediments, which are fine-grained soil particulates. These particulates are readily carried off from rain, accidental pipe breaks, or excessive watering from dust suppression and can impair the proper functioning of stormwater drainage systems, cause ecological damage to streams and rivers, and result in adjacent property damage.
Airborne Contaminants and Indoor Air Quality
Chemical Spills
Chemical releases related to spills or leaks can contaminate soil and groundwater. Exposures can include fuel or hydraulic fluid from construction equipment or potentially toxic materials such as solvents, paints, and sealants used and stored at a jobsite. A release could contaminate run-off and migrate into storm drain systems, drinking water wells, or off-site streams and rivers. This could lead to extensive cleanup liability and potential natural resource damage.
A Combined Pollution & Professional Liability Policy 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
First-party emergency response cost
Mold, legionella, bacteria, fungi, lead, asbestos, and more
Sudden and accidental coverage for owned/leased locations
Non-owned disposal site liability
First and third-party transportation pollution liability
Loading and unloading
Silt and sedimentation
Mitigation/rectification
Excess/contingent design
Defense of third-party claims
Natural resource damage
Claims Scenarios & Examples