Have you considered getting pollution liability insurance? You may not realize it, but this specific set of coverages might save your business from costly lawsuits and settlement claims.
No matter what type of business you operate or which industry you belong to, there is almost always a potential to produce pollutants or environmental hazards. And when these put the environment, other people, or the community at risk, you could face serious legal and financial consequences.
Examples of pollution liabilities
Nothing highlights the importance of pollution insurance more than real-world cases of pollution liability claims. Some of these cases involve multibillion-dollar conglomerates, but they could just as well involve small enterprises and startups.
One example involved a manufacturing firm that sought to expand its production department. While excavating the area, a sludge drying pit dating from the 1940s was discovered on the premises. Consequently, the manufacturer had to clean up the soil in the surrounding area at the cost of more than $400,000.
Another case involved an aerosol packaging plant located close to a river running through a residential area. Contamination was later detected in the town’s water supply, which was traced to the firm. After lengthy legal proceedings, the plant settled with the community for approximately $780,000.
Yet another case involved a silicone sealer distributor, which allegedly caused fumes to enter a department store via the ventilation system. Although the distributor had vendor’s insurance, it did not have pollution liability insurance. In the end, the company incurred uninsured losses amounting to more than $210,000.
Potential cases of pollution liability
Here are some cases wherein firms were potentially liable for pollution liability claims:
Legionella bacteria found in Disneyland Park in Anaheim, California
In Anaheim, Southern California, Disneyland Park had to shut down two of its cooling towers in response to reports of Legionnaires’ disease. The incidents were traced to the park’s water systems, which were found to have high levels of the bacteria that cause the condition.
Legionnaires’ disease is a severe type of pneumonia caused by Legionella bacteria. The condition is caused by breathing in mist from water systems in which the bacteria are present. Most such cases stem from contaminated air conditioning systems.
In the case of Disneyland Park, as many as nine people who visited the park contracted Legionnaires’ disease. All patients were aged 52 to 94 years old, and most were hospitalized due to the illness.
A review of the facilities traced the bacteria to the park’s two cooling towers. They were later treated with chemicals and remained shut down.
Asbestos at the Holiday Inn Baltimore
Asbestos was detected on the premises of the Holiday Inn in Baltimore following an explosion of one of the hotel’s steam pipes. The Maryland Department of the Environment recommended the installation of scaffolding and a shroud to contain the substance.
The steam pipe explosion occurred on Eutaw Street between Pratt and Lombard. Five people suffered injuries because of the blast, which also scattered debris throughout the area.
A subsequent environmental test of the area revealed significant amounts of asbestos, which was used as insulation for the pipes. Inhalation of asbestos is known to cause cancer.
The site is currently being subjected to thorough cleaning and remediation by contractors licensed by the environment department, who have removed the asbestos lining from the pipes. In addition, the air in the perimeter is constantly being monitored to determine if substantial amounts of asbestos remain.
Mold at the Austin School District
Five schools in Austin, Texas were found to have high levels of Aspergillus, a type of mold known to cause a variety of allergy symptoms. Also known as Penicillium, the mold was also detected in a parking garage in the area.
Most of the buildings in the school district have been standing for more than 40 years. Efforts to solve the problem include replacing air conditioning systems and cleaning and repairing the affected areas.
Why pollution liability insurance is so important
All these claims and potential liability scenarios highlight the importance of getting pollution liability insurance. Because of the high risk of pollution stemming from the use of chemicals or other materials, it isn’t easy to know for sure whether your standard insurance policy covers you for such claims. To ensure that your business and assets are protected, getting pollution liability insurance is a must.
About Arroyo Insurance Services
Arroyo Insurance Services was officially established in 1986, but we have roots dating back to before 1950. One of California’s leading client-oriented and independently owned agencies, we have over 140 employees with a combined experience of over 450 years, spread across 11 locations. We are committed to providing the best insurance and risk management services at the most competitive premiums, and backing it with hands-on service tailored to our customers’ needs. For more information on how we can mitigate your risks, contact us today at (877) 220-4769