Contractors

Marine Construction

CPL/PL

Marine contractors performing new construction, repair, and maintenance on marine and coastal infrastructure face many environmental risks and exposures. During construction activities, using powered equipment such as dredgers and cranes and applying chemicals, including sealants and coatings, can lead to the accidental release of hazardous materials and fuels into surrounding bodies of water. These releases can harm local wildlife, aquatic ecosystems, and vegetation, resulting in property damage, bodily injury claims, and expensive cleanup costs. Hazardous materials may also be present in waste collected at the jobsite and require special disposal procedures. Improper handling and transporting of hazardous waste can create additional environmental liability.

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Environmental and Professional Exposures May Include

Equipment Leaks
Stormwater Run-off
Submerged Hazard Releases
Air Emissions
Sediments
Asbestos
Ocean Dumping Act Violations
Design Failures
Pre-existing Contaminated Soil
Shoreline Alteration Liability

Equipment Leaks

Heavy equipment such as pile drivers, dredgers, and mobile tanks may be brought to a jobsite. A release of fuels or lubricant oils can occur from vandalism, malfunctions, or improper use, potentially discharging pollutants into the environment and requiring cleanup.

Stormwater Run-off

Marine construction projects typically involve earth-moving, excavation, and equipment operation near or on the water. Marine contractors must implement comprehensive stormwater management plans to control run-off during rainstorms. Improper stormwater management can lead to sediments and other pollutants being carried off, contaminating soils, degrading surface water quality, and impacting aquatic life, wildlife, natural habitats, and drinking water.

Submerged Hazard Releases

Equipment can strike an underwater pipeline or other unknown hazards, releasing hazardous materials that can contaminate the marine environment, leading to habitat destruction and harm to wildlife, resulting in cleanup costs.

Air Emissions

Many types of equipment used by marine contractors, such as those powered by diesel or propane, can emit carbon monoxide gas and diesel particulates. Improper controls or malfunctioning equipment can result in exceedances and regulatory violations. Additionally, an accidental release from stored chemicals may produce a vapor cloud. Air emissions or a vapor cloud release can pose health hazards to third parties.

Sediments

Dredging activities can resuspend sediments in the water, increasing turbidity levels and degrading water quality, negatively impacting aquatic wildlife and vegetation. These sediments may contain harmful substances, including heavy metals, polychlorinated biphenyls (PCBs), or petroleum residues. These contaminants can enter stormwater run-off, spreading to surrounding bodies of water and adjacent properties and potentially resulting in property damage claims and further environmental harm.

Asbestos

Older marine structures, including piers, docks, ships, and underwater pipelines, may contain asbestos-containing material (ACM). During reconstruction, renovation, or recoating, disturbing existing ACM can release harmful toxins. Depending on its condition, ACM may be regulated as hazardous waste and must follow procedures for handling, labeling, transporting, and disposing of it at an approved facility. A contractor can be considered a waste generator and retain cradle-to-grave liability.

Ocean Dumping Act Violations

The Ocean Dumping Act of 1972 prohibits the disposal of various materials into the ocean and mandates permits for certain other types of waste. Improper disposal of waste from construction sites, dumping outside of authorized areas, or a spill during loading, unloading, or transporting can lead to cleanup costs, environmental tort liability, and legal consequences for violating regulatory requirements.

Design Failures

Marine construction contractors may make modifications to design specifications while at the jobsite. Malfunctions arising from these changes create a direct professional liability for the contractor. Malfunctions from design errors of a sea wall or other erosion control systems can result in coastal flooding or habitat destruction, impacting schedule and costs and creating a direct professional responsibility for the contractor.

Pre-existing Contaminated Soil

During excavation and dredging, unknown pre-existing contaminated soil could be collected and create environmental liability in the transportation and disposal of the contaminated soil.

Shoreline Alteration Liability

The construction of marine infrastructure, such as piers or docks, can involve the modification of natural shorelines and coral reefs, disrupting ecosystems. Additionally, these infrastructures can use pre-treated wood containing toxic chemicals that can leach into the water and harm aquatic life and vegetation. Failing to adhere to environmental protection regulations to prevent habitat damage can result in regulatory fines and stricter enforcement measures.

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

Defense of third-party claims

Natural resource damage

Sudden and accidental coverage for owned/leased location

First and third-party transportation pollution liability

Loading and unloading

First-party emergency response costs

Mold, legionella, bacteria, and fungi

Lead and asbestos

Silt and sedimentation

Non-owned disposal sites

Mitigation/rectification

Excess/contingent design

Claims Scenarios & Examples

A heavy rainstorm during construction activities for a marine project caused significant run-off from the construction site, which had been undergoing earthwork, excavation, and equipment storage. Due to inadequate stormwater management systems and improperly stored materials, the run-off carried contaminated substances directly into the nearby bay, including soil, oil, and fuel. Cleanup costs totaled $80,000.
A marine contractor was accused of violating the Clean Water Act (CWA). The contractor was sued for allegedly dumping dredged rock, dirt, and sand into a Utah lake over a period of four months. The lawsuit was settled with the contractor ordered to pay for the restoration of more than 7 acres of wetlands and a civil fine of $150,000.
A marine contractor was identified as responsible for discharging oil from their vessel into the Great Harbor in Woods Hole, Massachusetts. Under the Oil Pollution Act of 1990, a $100,000 settlement was agreed upon for natural resource damages and cleanup reimbursements.
While constructing a new dock, a marine construction contractor inadvertently failed to properly contain the concrete slurry, which was discharged directly into the surrounding water. The slurry spread into the adjacent river, contaminating the water with high levels of concrete residue, which affected the local marine environment. After discovering the spill, the contractor initiated an emergency response by engaging a professional environmental cleanup company. In addition to a $10,000 fine, the total cleanup and environmental remediation costs came to $70,000.
During a project, a cutterhead suction dredge struck an underwater liquid propane pipeline, releasing about 6,000 gallons of propane and an unspecified amount of diesel from the dredge. This triggered an explosion and the emission of a gas plume, dispersing toxins into the air and damaging the surrounding habitat. According to the Coast Guard, an estimated 1,600 gallons of fuel was removed from the channel. Multiple lawsuits were filed against the contractor for bodily injury, property damage, and cleanup.

Final Consideration

As a contractor you can be faced with the cost to defend yourself against allegations or legal action from pollution or professional 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 claims handling expertise.

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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