Insurance Products

Products Pollution Liability

Products Pollution Liability insurance can protect an insured against bodily injury and property damage liability resulting from pollution exposures from product use, failure, or defect. Products can include any goods manufactured, sold, handled, distributed, altered, or repaired by an insured. Entities with a product’s pollution exposure can include manufacturers and distributors of products and businesses that install, service, recycle, or recondition goods. Products Pollution Liability can fill the coverage gap created by pollution exclusions in General Liability and Product Liability insurance policies.

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Products Pollution Exposures May Include

Hazardous Product Exposure & Chemical Toxicity
Supply Chain & Multi-Tier Product Distribution Liability
Pollutant-Handling Equipment Defects & System Failures

Hazardous Product Exposure & Chemical Toxicity

Bodily injury, property damage, or environmental damage resulting from exposure to a pollutant, such as a toxin, poison, flammable, combustible, oxidizer, or corrosive, from using a product.

Supply Chain & Multi-Tier Product Distribution Liability

The product’s pollution exposure extends beyond the manufacture and can include any company involved in the distribution or installation of the product.

Pollutant-Handling Equipment Defects & System Failures

Bodily injury, property damage, or environmental damage resulting from a pollution condition created by a product defect or failure associated with a piece of equipment that carries, stores, measures, transfers, or processes a pollutant.

Products Pollution Liability Coverage

Generally, a product’s pollution insurance policy will cover a claim when an insured is legally obligated to pay damages because of bodily injury, property damage, or environmental damage resulting from a pollution condition caused by a product and included in the products-completed operations hazard coverage.

Claims Scenarios & Examples

A company manufactured metal drums used to store acids and chemical solvents. A chemical distributor used these drums to supply products to customers. During the manufacturing process, there was a problem welding the seams for a batch of drums, and as a result, the chemical distributor had the containers fail while in use by a customer. While being moved, chemicals leaked from the drums onto the customer’s premises and into storm drains, which discharged to a nearby river. Cleanup and natural resource damages amounted to approximately $2 million.
A major department store had to evacuate and close for two days after fumes from an applied sealer entered the store’s ventilation system. The store sued the distributor of the silicone sealer. The distributor notified the manufacturer’s general liability insurer of the claim related to the department store; however, the insurer denied coverage based on an absolute pollution exclusion in the general liability policy. Based on the manufacturer’s insurance’s lack of product pollution coverage, the vendor’s coverage was worthless, and the distributor was left with an uninsured loss of $210,000.
A drum manufacturer sold several drums to a chemical distributor for packaging acids and solvents. A distributor customer reported that several drums ruptured at their facility while being moved, and after investigation, it was determined that there was a defect in the drum welds. The release impacted soils at the customer’s property and migrated in stormwater that discharged to a storm drain. The manufacturer was liable for cleanup costs associated with the release.
A customer dispensed gasoline at a gas station when the nozzle did not properly shut off, and the gas overflowed. The overflowing gas caused damage to the customer’s vehicle, and the customer alleged that they were injured. The claim settlement and defense costs incurred by the manufacturer totaled $50,000.
A company was filling reconditioned drums with hydraulic fluid for sale to customers to maintain their heavy construction equipment. The drums were rusted on the inside, and the rust contaminated the hydraulic fluid, damaging the construction equipment. The company was sued for third-party property damage and subrogated against the drum reconditioner.
Residents and employees at commercial businesses in the area of an industrial facility complained of dizziness and nausea, and several were hospitalized due to fumes. It was discovered that the industrial facility had installed defective new scrubbers as part of an upgrade to pollution control equipment, and pollutants were being released from the facility’s exhaust stack. The scrubber manufacturer was sued and forced to pay over $500,000 in damages.
A distributor sold a chlorine gas cylinder. The cylinder reportedly showed no signs of damage upon delivery; however, it did not have a safety plug. A release occurred from the cylinder that injured two grounds maintenance personnel. The distributor paid over $450,000 in defense costs and third-party bodily injury and property damage claims.

Final Consideration

Your business can be faced with the cost to defend itself 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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