Booming construction in Utah and in states across the nation are a strong indicator of economic growth. The construction trades in Utah face numerous risks in their daily operations, necessitating the protection of Utah construction insurance. Environmental liability, such as unexpected pollution or wastewater discharges, has been a source of confusion for many construction contractors. Damage caused by hazardous material spills on construction sites can cost millions of dollars in cleanup costs and regulatory penalties. Still, many contractors forgo this valuable protection. Is insurance against pollution liability claims necessary? In this guide, we will explore environmental liability risks and the role of Utah construction insurance in protecting business owners against those risks.
What is Environmental Liability Insurance?
Common in manufacturing industries like mining, agriculture, and petroleum production, environmental liability insurance is designed to protect business owners against pollution spills or hazardous waste emissions. This insurance also plays a critical role in the construction sector. Typical pollution liability policies include coverage against first- and third-party bodily injury and property damage claims as well as:
- Cleanup expenses associated with hazardous materials discharges
- Legal expenses
- Regulatory penalties
- Business interruption
Liability insurance covers construction companies while they are on the construction site and after the project is completed. In other words, if there is a hazardous materials incident after the job is completed, construction companies with these policies are protected from liability claims.
Why Do I Need Pollution Liability Insurance?
In the middle part of the 20th century, pollution liability was typically covered under general liability insurance policies. That changed in the 1980s, when insurers began excluding this important coverage. Manufacturers and construction companies often had to purchase standalone policies as a result.
For construction companies and independent contractors in the state of Utah, Utah construction insurance policies have optional environmental liability coverages available. In fact, many contractors are required to show proof of this insurance coverage before taking on a job. Failure to obtain pollution/environmental liability insurance can be costly; a single hazardous waste spill can cost millions of dollars in unforeseen expenses.
Construction companies may not understand the need for this form of liability insurance coverage. The truth is that nearly every construction operation benefits from environmental liability insurance. Even if you do not work with hazardous materials, such hazards may be uncovered during work or after a job is completed. A jobsite accident, such as a fuel spill or discharge of wastewater, can result in significant penalties and cleanup costs. Environmental regulations are ever-changing as well; what falls under current regulations may result in liability claims in the future as environmental protection regulations evolve.
Utah construction insurance is the foundation of risk management in the construction industry, but this insurance solution is not always enough. Construction companies in Utah and throughout the United States must carefully consider the benefits of environmental liability insurance, helping to protect them against pollution claims now and into the future.
About BTC Insurance Services
Founded in 2011, BTC Insurance Services has proudly served Utah businesses with comprehensive and custom-tailored insurance coverages for a decade. We pride ourselves on fostering long-term client relationships with a personalized and hands-on approach, and have established a reputation built on quality and transparency. For more information about our products and services, we invite you to contact one of our reputable agents today at (855) 944-3457, or send us a message here.