Why a Contractors Pollution Liability policy may be necessary
One of our prior articles explained that it is highly unlikely that a remodeler’s General Liability policy would respond to a lead paint claim. This is due to prevalence of the Absolute Lead Exclusion Endorsement. Instead, remodelers need to look to a Contractors Pollution Liability policy for protection.
We recently had the chance to analyze one of the leading Contractors Pollution Liability forms in the market. Here are some of the highlights of their special policy form designed for remodelers:
Basic underwriting and policy Information:
- Carrier Financial Rating (Best’s Rated A IX)
- Eligible risks: remodeling, renovations, and trade contractors that are impacted by the EPA Renovation, Repair and Painting regulation, or RRP.
- Required: Lead Safe Work Practices Training Certificate for firm and individual renovators
- Ineligible risks: demo only contractors and pure abatement contractors (separate policy form is available for these contractors that includes higher rates and narrower coverages).
- Limits available: $1,000,000 to $10,000,000
- Occurrence policy form (superior to claims made policy form).
- Deductible: standard deductible is $5,000 per claim
Special endorsements adding enhanced coverages:
- Lead Abatement: always make sure that all CPL policies include coverage for lead paint abatement as many don’t.
- Fines/Penalties: a reduced sub-limit is available on a claims made for to cover certain EPA fines and violations.
- Lead Testing/Sampling: covers errors made in incidental lead testing and sampling per the EPA regulations. Coverage is on a claim made form.
- Transportation Including Loading and Unloading; covers exposure incidents resulting from auto accidents and loading and unloading if lead dust is released.
- Non-owned Disposal Site: covers remodeler if shot gunned into lawsuit due to use of non owned dump.
- Additional Insureds can be added
- Waiver Of Subrogation can be added
- Mold Coverage
Contractor Pollution Liability sample pricing:
(based on test ratings of remodelers in South Carolina)
- Minimum premiums: around $2500 for $1,000,000 limit of coverage
- Rates based on per $1,000 of total revenues for both lead and non lead jobs.
- Sample $1,000,000 limit rates per $1,000,000 of revenue
– Less than $1 million in revenue: $2.55
– $1 million to $2 million in revenue: $1.20
– $3 million plus in revenue: $1.11
Are many remodelers currently purchasing CPL policies?
Not yet, but demand is expected to increase as word spreads about high profile lawsuits with large settlements or jury awards. The EPA RRP regulation which will create liability for failure to comply with standards is approximately one year old and it takes time for claims to work their way through the legal system. In addition, attorneys specializing in lead paint will begin to educate the public and advertise for clients.
If you are interested in a quote, please contact call Sadler & Company at 800-622-7370 or email us.