Contractors

Solar

CPL/PL

Solar contractors can face environmental liability through various operations, materials, and disposal activities. Improper design and installation of solar energy systems could allow water intrusion into building materials and result in mold growth or hazardous bacteria, such as legionella, in water heating systems. Contracting operations can lead to an accidental release of existing pollutants or create a pollution release from materials used, stored, and transported, such as adhesives and sealants. Waste materials could be classified as hazardous, and improper handling and disposal could lead to environmental liability and potential fines. Solar energy design is also becoming a fast growth area that can expose contractors to professional liability by direct design services, design input, or changes to system design.

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Environmental & Professional Exposures May Include

Asbestos Roofing Materials & Inhalation Hazards
Solar Thermal Water Systems & Legionella
Solar Energy System Design & Engineering Liability
Jobsite Design Modifications & Field Spec Changes
Subcontractor Oversight & Vicarious Liability
Roof Penetrations & Mounting-Related Mold Exposure
Solar-Thermal Plumbing Leaks & Moisture Intrusion
Jobsite Chemicals & Toxic Vapor Intrusion
Solar Panel E-Waste & RCRA Hazardous Disposal

Asbestos Roofing Materials & Inhalation Hazards

During installation, asbestos-containing materials (ACM) may be encountered in various roofing materials such as tar and asphalt liquids, felt and underlayment, caulking, mastic, flashings, vents, cement-based shingles, flat-sheets, and corrugated asbestos roofing. Disturbed, drilled into, or cracked ACM can cause an airborne release of inhalable fibers, serious health hazards, and fatal diseases such as asbestosis and mesothelioma and require ongoing medical monitoring. Improper disposal of jobsite waste that contains ACM can result in environmental liability.

Solar Thermal Water Systems & Legionella

Legionella is a bacterium that causes a form of potentially fatal pneumonia. It can grow in solar-thermal heating systems where the bacterium can accumulate in warm, stagnant, or infrequently drained water from the storage vessel. Errors in design/assembly, poorly maintained systems, and inadequate sanitizing of parts and surfaces can support growth. Exposure to third parties can result in severe health issues like Legionnaires’ disease.

Solar Energy System Design & Engineering Liability

Companies may provide in-house design services that can result in professional liability. Design work may include performing all the design work, performing some work relative to an aspect of the solar energy system, or providing professional opinions on design aspects. Design exposures can include the design and engineering of the system, selection of parts and equipment, considerations of roof material and structure, building orientation, loading requirements, and compliance with building and electrical codes and utility interconnection requirements. Errors and omissions can delay time, budget overruns, and rework.

Jobsite Design Modifications & Field Spec Changes

Contractors may make modifications to design specs while at the jobsite. Malfunctions arising from these changes create a direct professional responsibility for the contractor.

Subcontractor Oversight & Vicarious Liability

Subcontractors may be used for electrical, mechanical, plumbing, or roofing work, and the contractor may have to defend against claims relating to work for which they were responsible due to the hiring, selection, and supervision of the subcontractors.

Roof Penetrations & Mounting-Related Mold Exposure

Installation of solar panels can involve drilling holes into the roof. An improperly installed section of solar racking, including the flashing and sealants, can cause water to leak into the building’s underlying wood and structure and grow mold and algae, leading to property damage and posing health hazards to building occupants. Improperly mounted anchors can also pull out of roofing from exposure to heavy winds and create an entry for moisture intrusion to occur.

Solar-Thermal Plumbing Leaks & Moisture Intrusion

Improper installation and maintenance of solar-thermal water heating systems, including pipes, fittings, pumps, tanks, and freeze protection, can leak and corrode, resulting in water intrusion into building materials and subsequent mold growth.

Jobsite Chemicals & Toxic Vapor Intrusion

Installation operations involve using various materials such as adhesives, solvents, sealants, silicones, tar, and polymers that can be flammable, toxic, and hazardous. Accidental spills and leaks at the storage location, during transportation, and at the jobsite may cause third-party exposures and cleanup. These materials can give off toxic, hazardous toxins or fumes that can be drawn into the building and ventilation system. Flammable products may result in a fire that spreads and releases other contained materials and produces hazardous vapors.

Solar Panel E-Waste & RCRA Hazardous Disposal

Contractors can be held liable for improper disposal of materials. Solar panels are manufactured using hazardous materials such as lead, cadmium, sulfuric acid, silica, and chromium and are considered a form of toxic, hazardous electronic waste. Disposed materials can pose an environmental liability if toxic materials leach out and contaminate soil and water supplies. Contractors are also responsible for determining if spent solvents, chemicals, lead-acid batteries, and other wastes are subject to the Resource Conservation and Recovery Act (RCRA) hazardous waste regulations. Improper disposal could lead to cleanup and third-party liability, and there may be legal consequences for violating RCRA hazardous waste requirements.

A Combined Pollution & Professional Liability Policy Can Provide Coverage For

Combining Commercial General Liability, Contractors Pollution Liability, and Professional Liability into one package policy may be available for solar contractors. Excess liability may also be offered.

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

Mold, legionella, bacteria, fungi, lead, and asbestos

First and third-party transportation pollution liability

Sudden and accidental coverage for owned/leased locations

Non-owned disposal sites

Loading and unloading

Defense of third-party claims

Professional liability

Mitigation/rectification

Excess/contingent design

Claims Scenarios & Examples

An office building hired a roofing contractor to design and install a new roof, including solar panels. A licensed engineer that the contractor had in-house did the design; however, the engineer did not factor in the correct load factors along with the weather. The roof had to be fixed as a result. Costs to redo the work and defend the contractor and the claims exceeded $650,000.
After rooftop solar panel systems above several stores caught fire, the retailer sued the solar company. The retailer sued for breach of contract and gross negligence, claiming that the panels had loose wiring and “hot spots.” Gross negligence was alleged in the panels the company designed, installed, and promised to operate and maintain safety on the store roofs. The retailer also said that the solar company had untrained workers that did the installation with “utter incompetence or callousness, or both.” The retailer requested the solar company remove solar panels from all 240 locations where they were installed and pay for damages from the fire.
After constructing a new green building, a community college found several issues with the system and filed a lawsuit. The college found 20 defects, including the solar-thermal-based absorption chiller with over 150 solar thermal collectors on the roof. The system was designed to heat and cool the building. However, due to the system design and pump failure, the condensation, evaporation, and pressurization cycle to absorb the heat and cool the building failed in the summer. The college sued the architect, general contractor, and all trade contractors.
After solar panels were installed on the roof of a residential home, the home experienced roof damage. The homeowner claimed water poured into their bathroom upon removing some damp sheetrock from the ceiling. An inspector found three holes in the roof above the bathroom where brackets for the solar panels had been installed, as well as cracked shingles. Repairs cost thousands of dollars.
Solar panels were installed on a residential property, and three months later, mold began to grow from a small leak. As a result, a professional mold remediation company had to come clean up the mold.
Solar panels were installed on a residential property, and three months later, mold began to grow from a small leak. As a result, a professional mold remediation company had to come clean up the mold.
A solar contractor faced claims from two customers who said the battery banks on their solar systems exploded. An investigation found that pressure had built up in the tubing of the watering system, causing the batteries to explode, resulting in property damage. After the explosion, the batteries began smoking and leaking battery acid. The batteries and absorbent materials used to clean up the acid had to be disposed of properly.

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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