Pollution a Pending Problem for Manufacturers
In January of this year, the largest public pollution award in California history was ordered against three paint manufacturers to the tune of $1.5 Billion. That’s “billion” with a ‘b.’ This award came after nearly 14 years of litigation for lead-based paint the manufacturers sold decades ago. This is simply just one example of how long and costly pollution claims are.
It’s easy to dismiss these incidents as outliers, but the truth is, nearly every manufacturer has an exposure: any substance can harm land, water, wildlife or humans significantly. Combine that with increasingly stringent environmental legislation, and even the most benign manufacturing process can incur huge costs for a minor event.
A standard general liability policy offers little coverage for these types of claims, and carriers often add “absolute” pollution exclusions for those who are at higher risk, like manufacturers. Because of this, pollution-specific insurance products exist to mitigate your risk, ranging from site-specific pollution policies to much broader policies that cover a wide range of pollution events, emergency costs and fines.
All manufacturers should investigate this coverage considering every process involves the use of cleaners, lubricants and fuels that can cause serious harm if released. However, manufacturers whose processes involve have heavy metals, hazardous wastes, or similar are at especially high risk.
If there’s one thing to remember about pollution claims, it’s that they often arise unexpectedly, happen several years after the fact and incur enormous costs. Whether you’re a small operator or a large facility, a pollution mitigation plan, including insurance, needs to be a top priority. Otherwise you might just find yourself in the headlines.
Check out our webinar replay to see just what that general liability policy covers.
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