Blog - Month: May 2025
Why Your Business May Need Pollution Insurance
Many businesses that produce some type of pollutant throughout the course of daily business operations don’t know they are doing so.
Others know they are producing pollutants and have processes and safeguards in place to reduce their release into the environment. A business can be held liable for some very costly damages when these byproducts pollute another property or harm another individual.
Pollution liability clauses were once part of general liability policies, but the extensive asbestos problems in the 1970s spurred most insurers to remove pollution protection from their general liability policies.
Today, pollution liability coverage is obtained through a separate pollution insurance policy. Pollution insurance policies are written for businesses of all sizes, shapes, and forms – from pig farms and printers to apartment complexes, salons, and dry-cleaning businesses.
Why pollution insurance?
Many businesses run the risk of creating pollution during normal daily operations.
There’s also a risk from any existing pollution already on a business’s site of operation. In either case, a business could be held liable if its pollution ends up on a third party’s property, causes damage to the property or harms an individual.
Without insurance, the business would be on the hook for paying for those damages out of pocket.
What do policies cover?
The basic premise of a pollution policy is that an insured party gets a claim related to damages caused by pollution it caused.
This insurance will protect your financial interests in the event a clean-up becomes necessary. Buying pollution liability insurance will cover your interests against lawsuits where a third party could be injured by a toxic substance produced as a result of your work.
Like most types of insurance, the specifics of a pollution policy can vary somewhat from insurer to insurer.
Depending on the insurer, a pollution policy will typically cover
- Damage to properties and individuals
- The cost of cleaning up pollution on a third party’s property
- Pollution incidents that occurred after the policy was
- Investigative, legal, and court costs should the claim enter the legal system.
Who needs coverage?
Businesses that have risks related to the handling of pollutants and hazardous materials, design professionals who work with projects where there are environmental issues as well as those who own and occupy premises that have environmental issues need pollution liability insurance.
This includes:
- Property owners and tenants whose buildings and land have a history of having pollutants on the property or premises. This would include a building on land that had an underground storage tank that leaked fuel oil before it was removed, contaminating the soil.
- Contractors such as roofers who handle pollutants like tar as a part of their operations need contractors pollution liability insurance to cover damage resulting from a pollution incident.
- Architects and engineers who are involved in projects that have issues related to pollutants need to add pollution liability to their errors and omissions insurance policy to manage the risk of making a mistake regarding the presence or absence of pollution issues as they plan and execute a project.
The takeaway
Don’t overlook pollution insurance as an important element of risk management. Should any questions or concerns about pollution insurance and insurance requirements arise, call us.
10 Tips for Dealing with OSHA
When OSHA shows up, it’s not the time to figure things out on the fly. Whether you’re in construction, manufacturing or any other field with safety exposure, knowing the ground rules can make all the difference between a successful visit or one where you leave yourself exposed to penalties and a drawn-out appeals process.
If you aren’t careful and prepared, fines can quickly pile up. Here’s a quick guide to help you handle inspections, citations and communication with OSHA before, during and after they step on site.
1. Ensure you have a walkaround rep
Under OSHA regulations, you are allowed to have someone represent you during an OSHA inspection — yes, even an attorney. It’s a smart move to assign someone in advance who knows your operations and safety protocols and can speak on your behalf.
2. Sit in on manager interviews
OSHA has the right to interview members of your team. If they interview one of your managers or supervisors, you have the right to be present. It’s a good idea to have a company rep or legal counsel there to help ensure the facts are clear and accurate
However, if they decide to interview a non-managerial employee, you do not have the right to have a manager present.
3. Employees have choices too
Non-supervisory employees can choose to speak with OSHA privately, but they don’t have to. They have the right to refuse to participate in an interview with OSHA and end an interview at any time. They can also refuse to allow OSHA to record the meeting.
Conversely, you cannot take retaliatory action against an employee who agrees to be interviewed.
4. There’s a six-month deadline for citations
OSHA can issue citations up to six months after a violation occurs. However, if it later learns you concealed a violation or misled them, the clock resets to when they learn of the subterfuge. If you don’t hear back in the first month or two after an inspection, you are not out of the woods for several more months.
5. You have 15 working days to respond
If you get a citation, the clock starts ticking. You have 15 business days to formally contest it. But you also have the option to negotiate a resolution before that deadline by requesting an informal conference, which can sometimes be a faster and less expensive option. Employers often use these informal conferences to negotiate the settlement of a citation before resorting to legal remedies in a formal contest.
6. No injury? You can still be cited
A workplace injury might bring OSHA in the door, but they can cite you for any unsafe condition they find during the inspection — even if no one was hurt or the issue wasn’t what prompted the visit.
7. “Not my worker” isn’t always a defense
On shared job sites, you can be cited for hazards affecting another company’s employees under OSHA’s multi-employer doctrine. If your team creates or controls a risk, such as the owner of a construction project, you’re potentially responsible — even if the injured worker is a subcontractor’s employee.
8. Hazards can be cited, even without a rule
Under OSHA’s general duty clause, it can cite you for a serious hazard even if no specific standard exists — if you haven’t taken reasonable steps to prevent or abate the risk.
9. Citations don’t have to be detailed
OSHA doesn’t need to spell out every detail in a citation. As long as you get fair notice of what’s being alleged, you’ll need to get further clarity through the legal or discovery process.
10. Request inspection records using a FOIA request
You can request OSHA’s inspection records using a Freedom of Information Act request. These files can provide insight into why OSHA took certain actions and help you better prepare for what comes next.
Stay proactive, not reactive
Having a game plan for an OSHA inspection is smart, especially for employers in higher-risk industries. Clear communication, proper documentation and knowing your rights can protect your company and your team.
Check Subcontractors’ Insurance Policies
Did you know your firm can be held liable under your own workers’ comp policy if a subcontractor’s employee is injured? Courts have ruled time and again that if a company hires a subcontractor without coverage and an employee gets hurt on the job, the injured worker can seek coverage under the hiring company’s policy.
In many cases, an injured worker may even be a third- of fourth-level contractor, but if none of your subcontractors are carrying workers’ comp, a claim can hit your own policy. This scenario is even more likely if your firm, as the main contractor, has substantial control over the sub’s employees.
To determine coverage, courts generally start with the sub whose employee was injured and move up the chain until they find a valid workers’ comp policy.
Protect yourself by requiring your subcontractors to have a certificate of insurance. But don’t stop there; you should call the insurance carrier to see if the certificate is valid.
You can check also with your state’s contractor licensing to see if your subcontractor has workers’ comp coverage.
FAIR Plan Commercial Property Coverage Limits to Rise
California Insurance Commissioner Ricardo Lara has approved a request by the FAIR Plan to increase commercial property coverage limits.
The move is aimed at ensuring that commercial facilities insured by the FAIR Plan are not underinsured, which can be devastating if they suffer a total loss.
Under the new limit, the FAIR Plan will create a new “high-value” commercial property coverage option for larger housing developments, farms and businesses with multiple buildings at one location.
The new limits will be up to $20 million per building, with a total maximum limit of $100 million per location — up from the current limit of $20 million per location. The FAIR Plan must make these new coverage limits available to all eligible applicants for both new and renewal policies before July 26, 2025.
The decision comes as commercial property rates continue rising due to inflationary pressures, particularly for companies in areas considered urban-wildland interfaces.
Insurers have pulled back on underwriting commercial properties as well as homes in the state due to increasingly destructive wildfires and their inability to get rate increase requests approved by the Department of Insurance.
Businesses located in wildfire-prone areas and those in smaller towns have found it increasingly difficult to secure coverage. If they are unable to secure coverage with a private insurer, their only option is the FAIR Plan.
FAIR Plan policies are not a complete replacement of a commercial property insurance policy. These are named peril policies, which provides coverage only for damage caused by the specific causes of loss listed in the policy:
- Fire
- Lightning
- Internal explosion
Optional coverages are available at an additional cost, such as for vandalism and malicious mischief.
Comparatively, typical commercial policies offer the following:
Basic form policies. They provide the least coverage, and usually cover damage caused by fire, windstorms, hail, lightning, explosions, smoke, vandalism, sprinkler leakage, aircraft and vehicle collisions, riots and civil commotion, sinkholes and volcanoes.
Broad form policies. These policies usually cover the causes of loss included in the basic form, as well as damage from leaking appliances, structural collapses, falling objects and the weight of ice, sleet or snow.
If you must go to the FAIR Plan, we can arrange for a “differences in conditions” policy that will cover the areas in which the plan is deficient compared to a commercial property policy.
The FAIR Plan will cover the following commercial structures:
Habitational buildings — Buildings with five or more habitational units, such as apartment buildings, hotels or motels.
Retail establishments — Shops such as boutiques, salons, bakeries and convenience stores.
Manufacturing — Companies that manufacture most types of products.
Office buildings — Offices for professionals such as design firms, doctors, lawyers, architects, consultants or other office-based functions.
Buildings under construction — Residential and commercial buildings under construction from the ground up.
Farms and wineries — Basic property insurance for commercial farms, wineries and ranches, not including coverage for crops and livestock.
A final word
The higher limits will come as a relief to many businesses in California whose properties’ replacement costs far exceeded the FAIR Plan limits. That said, premiums remain high under the FAIR Plan.
Besides the FAIR Plan, there is another option if you can’t find coverage. We can try to find coverage in the “non-admitted” market, which consists of global insurance giants like Lloyd’s of London.
These entities are not licensed in California, but they can still cover properties in the state, which we can access through a surplus lines broker.