By Thomas Gardner, Gallagher/Affinity

As the owner of a landscaping or contracting business, you might be at risk of being held liable for pollution if your company's negligence causes some sort of environmental harm. Liability claims can drain your business's finances and they can hurt your reputation as well. It's important to protect yourself from liability in order to keep growing your business without interruption. This article will help you identify and avoid liability risks so that you don't end up paying out big bucks because of an accident or negligence on your part.

What is pollution liability?

Pollution liability is a type of insurance that business owners can purchase to financially protect themselves in the event that their operations pollute the environment. While your general liability policy covers some things, it leaves gaps when it comes to pollution. This coverage can help pay for cleanup costs, third-party bodily injury or property damage and legal fees associated with pollution incidents.

A lot of landscape contractors think their exposure to pollutants is limited to the herbicides, pesticides and fertilizers they use. According to the International Order for Standardization (ISO), pollutants are any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. It is important to remember that there are many more pollutants that are necessary to this line of work than those that are assumed, including fuel, oil, fumes, hydraulic fluids, wood stain, paint, manure, dust, waste, water, natural gas, propane and mold.

Why do you need pollution liability?

Any time the soil is disturbed, pollution could potentially be created. You and your team likely work in the dirt every day. While doing this work someone might disrupt unknown or naturally occurring contaminants in the soil or damage a sewer/septic system. They may also bring contaminants onto the site by accident via fertilizer, mulch or other materials. Another potential pollution source is the transportation and storage of your equipment, materials and chemicals.  

Examples of incidents:

As mentioned above, there is a long list of potential pollution issues that a landscaper could face on a daily basis. Here are a few examples of pollution that could lead to your company being sued for damages.

  • Your company sprays a herbicide or pesticide in a client's yard, then rain or wind causes the pollutants to be carried into a neighboring property where it comes into contact with a human or animal and causes harm. Your company could be sued and potentially liable for those damages.  
  • While on the road between job sites, a pollutant that was not loaded properly falls off and spills on the road. This spillage could create a dangerous situation that requires extensive cleanup. Public authorities would have to be involved and the potential costs could get out of hand quickly.  
  • You unknowingly bring a pollutant onto a client's property in fill dirt that was needed for a project. In doing so, someone is exposed and injured by the pollutant. You could be held liable for the cost of those hospital bills and any ensuing care.

 
Four easy things you can do to reduce your risk of getting sued for pollution damage:

1. Keep detailed records of the chemicals you use and where they are applied.  
2. Have a plan in place for managing and disposing of hazardous waste.  
3. Regularly inspect your equipment for leaks or spills. If any spills happen, be sure to report them immediately so that proper cleanup can take place.
4. If your company does hire other contractors, be sure that those contractors have appropriate pollution liability insurance coverage and training.

How pollution can affect your business.

If your business produces any kind of pollution, you could be held liable for damages caused by that pollution. This includes anything from air pollution to water contamination. Even if the pollution is caused by someone else, you could still be held responsible if it can be traced back to your business. That's why it's important to have pollution liability insurance, which can help cover the cost of any damages you're found liable for. These damages can vary greatly in terms of expense, sometimes costing businesses hundreds of thousands of dollars. Costs like that can destroy even a well-established landscaping company.  

What can you do to protect yourself?

There are a few things you can do as a business owner to help protect yourself from pollution liability. First, make sure you are aware of the environmental regulations that apply to your business. Second, have procedures in place to prevent pollution and train your employees on these procedures. Third, monitor your compliance with environmental regulations. Fourth, keep accurate records of your compliance. Finally, consult with an experienced environmental attorney to ensure that you are taking all of the necessary steps to protect your business. Even if you do all you can to cover yourself and your business, accidents can happen. Pollution liability coverage from Gallagher Affinity is here to make sure those accidents don't turn into catastrophes.

Learn more about available coverage at gallagheraffinity.com/mnla or contact MNLA’s insurance expert Ashley Thomas of Gallagher Affinity at 918.764.1619 or ashley_thomas@ajg.com for a coverage review.

The information contained herein is offered as insurance Industry guidance and is provided as an overview of current market risks and available coverages and is intended for discussion purposes only. This publication is not intended to offer legal advice or client-specific risk management advice. Any description of insurance coverages is not meant to interpret specific coverages that your company may already have in place or that may be generally available. General insurance descriptions contained herein do not include complete Insurance policy definitions, terms, and/or conditions, and should not be relied on for coverage interpretation. Actual insurance policies must always be consulted for full coverage details and analysis. The claim scenarios described here are intended to show the types of situations that may result in claims. These scenarios should not be compared to any other claim. Whether or to what extent a particular loss is covered depends on the facts and circumstances of the loss, the terms and conditions of the policy as issued and applicable law. Facts may have been changed to protect privacy of the parties involved. Insurance brokerage and related services to be provided by Arthur J. Gallagher Risk Management Services, Inc. (License No. 0D69293) and/or its affiliate Arthur J. Gallagher & Co. Insurance Brokers of California, Inc. (License No. 0726293)