Claim Scenarios

Road Work – Dust Claim

Road contractor was employed on a highway reconstruction project.  A local homeowner filed a lawsuit against all companies working on the project for damage to their home and alleged bodily injuries from exposure to construction dust from the project.  Covered defense costs were almost $30,000.

Construction Defects – Mold Claim

A general contractor finished the construction of a nursing home in 2008.  A recent inspection by the owner of the nursing home revealed substantial water intrusion and mold contamination in various areas of the building with damages expected to exceed $1 million.  Inspections by various experts exposed several construction defects.  Almost half of the damages were associated with mold.

Redevelopment – Unknown UST Claim

During the demolition and re-grading activities of a redevelopment project, the general contractor pierced an unknown heating oil tank.  The residual heating oil was released into the environment.  The heating oil migrated into the groundwater, causing an extensive cleanup and remediation under government oversight.  Remediation and project delay costs exceeded $750,000.

General Contractor – Mold Coverage Gap

Two years after the completion of a new school, it was discovered that water was infiltrating through the window system into the building. The water intrusion created the right environment for the growth of mold. It was determined that faulty installation and window defects were the cause.  The contractor and the windows manufacturer shared remediation costs.  The contractor did not have pollution coverage for mold and paid close to $1,000,000 out-of-pocket.

Negligent Environmental Site Assessment Reporting

An environmental consultant was hired by the owner of a parcel of land to prepare Phase I / Phase II Environmental Site Assessment reports in support of a real estate transaction. After the property transferred to the new owner, a lawsuit was filed against the consultant and the previous owner. The lawsuit alleged that the site assessments were negligently prepared and that the reports failed to inform of the extent of the contamination on the property and failed to meet the applicable ASTM standards. The lawsuit listed damages in excess of $1,200,000.

The Professional and Contractor’s Pollution Liability combo policy responded by retaining local defense attorneys to defend the consultant.  A settlement was reached with the new property owner for the reduced amount of $30,000.

Vacuum Truck Hose Failure

An environmental services contractor was hired to perform a tank cleaning by their client.  During the tank cleaning, a 4-inch hose connected to the contractor’s vacuum truck failed. 127 gallons of fuel oil was released onto the ground and flowed into an adjacent waterway.

The contractor called the 24-hour/7-days a week emergency response hotline, listed in their Contractor’s Pollution Liability (CPL) policy, immediately after the spill.  The insurer coordinated with their local environmental technical consultant and the contractor to respond to the spill. An experienced environmental remediation firm was sent to the site of the release to start the remediation effort.  The local firm also interacted with the State environmental agency on the contractor’s behalf. The contractor’s CPL policy paid $209,000 for expenses associated with this release.

Miscalculated Emissions Data Submitted During Permitting Process

An environmental consultant was contracted to provide environmental permitting services for a wood products manufacturer (client). The client was planning to build a facility and the consultant was hired to assist in obtaining the required air permit. The consultant secured the permit and construction of the facility was completed.

About five years after the facility started operating, the regulatory agency claimed that the client had underestimated methanol emissions from the facility, calculating 13,500 lbs/year, when the actual emissions were about 117,000 lbs/year. Due to this miscalculation, the client was fined by the regulatory agency for $162,000. The client sued the contractor, seeking recompense for the fine and associated attorney fees.

The contractor’s Professional and Contractors Pollution Liability combo policy was triggered and their insurance company retained local defense counsel to investigate the allegations made. A determination was made the contractor would have liability to the client in the amount of $150,000. The parties attended mediation and settled for payment of $150,000 under the contractor’s policy.