SWG ENVIRO - Environmental Pollution Insurance: Filling the Gaps in the Construction Industry

Construction projects are rarely neat and tidy. In fact, with long project timelines, plus the constant exposure to hazardous materials and environmental contaminants, construction projects are liability landmines. Among the major risks in the construction industry, pollution liability is a major one. It affects not only contractors but also the people and properties neighbouring the construction site.

Assessing Environmental and Health Hazards

Canada’s booming construction industry is a major source of environmental pollution. The two main types of construction pollution, according to the Toronto Environmental Alliance, are:

  1. Dusts (from soil, gravel, wood, silica minerals such as asbestos, non-silica minerals, and demolition)
  2. Diesel exhaust emissions (from heavy-duty vehicles, road-building machines, and stationary engines) (1)

Different types of construction produce different types of pollutants. According to an assessment by the Toronto Environmental Alliance (2), demolition and earthworks (which includes activities like on-site concrete batching and sandblasting) have the highest dust creation potential for a localized area. Dragouts carried the lowest dust creation potential, while construction was given a medium rating.

In Canada, the construction sector is by far the largest group of workers exposed to silica dust, a known carcinogen. Construction projects in localized areas also expose neighbours to health risks via environmental contamination:

Workers and neighbours of a construction site may develop health problems due to prolonged exposure to airborne contaminants

A construction worker at a renovation site may unknowingly cut into silica-containing material and release silica mineral-bearing dust into the building

Dusts rising from drilling and demolition sites could contaminate neighbouring soil

Diesel and oil emissions, debris, or harmful chemicals from a construction site could contaminate local water

Land cleared for construction causes soil erosion that creates silt-bearing runoff and sediment pollution, which could contaminate water

Project managers may unwittingly be building with materials containing asbestos

Why the Construction Industry Needs Pollution Insurance

Under a standard-form commercial insurance policy, coverage has a limited scope and typically excludes asbestos, mould, and other pollutants. SWGENVIRO Environmental Pollution Insurance, covers the gaps and exclusions left by CGLs. Our policies are designed for industries like Contractor’s Environmental Liability/Annual and Project-Specific Liability and Premises Environmental Liability. At SWG, we can provide both these categories under one customized policy.

SWGENVIRO - Premises Environmental Liability (PEI) policy covers the risks of pollution that arise at specified premises. Coverage is provided on a claims-made and reported basis and includes the following highlights:

Sudden and gradual pollution events

Broad definition of pollutant including asbestos & mould

Illicit abandonment of pollutants

On-site and off-site clean-up costs

Restoration costs

Emergency response costs

And more

SWGENVIRO Contractor’s Environmental Liability – Annual & Project Specific policy addresses the pollution risks from annual and project-specific contract work. Coverage is provided on a claims-made and reported basis and includes enhancements such as:

Retroactive cover for historic work

Transported cargo

Waste disposal / Non-owned disposal sites

Separate project-specific limits

More details about these policies are available on our website.

Our environmental insurance products are designed to provide clients with the broadest possible to protect their business from clean-up costs, defense costs, and legal obligations arising from pollution events - whether such events are sudden and accidental or gradual in nature.

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Source:
(1) https://d3n8a8pro7vhmx.cloudfront.net/toenviro/pages/3415/attachments/original/1539567442/Dust_Creation_Magnitude_Chart.pdf?1539567442

(2)https://www.torontoenvironment.org/types_of_construction_pollution