Contrary to popular belief, Oil and Gas, Nuclear, and Contractors companies are not the only industries that are exposed to a potential pollution claim. Manufacturers also have a significant exposure to Pollution Claims.
Most, if not all, standard insurance policies include an absolute pollution exclusion. This exclusion removes coverage for bodily injury or property damage caused by any pollutant, which is defined as follows, “any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed.” This would include any manufactured product regardless of the industry, therefore creating a major gap for manufacturers.
Manufacturers Environmental or Pollution policies offer a bridge to cover this gap, and in effect ensure that companies are fully protected. The intent of these policies is to cover everything from First- & Third-Party On- and Off-Site Property Damage and Bodily Injury, to Emergency Response Costs incurred from an incident.
Sometimes it is difficult to identify what types of situations would require environmental or pollution liability coverage. We’ve put together a few key examples of exposures relevant to manufacturers, why they are a concern, and what types of coverage would specifically apply to those situations.