Remember the Pollution Exclusion

Remember the Pollution Exclusion

Over the past twenty years, the insurance industry has been hammered by the courts on pollution claims. Now, most standard insurance policies have pollution exclusions so broad that the industry calls them “absolute pollution exclusions.”

Liability arising out of pollution is excluded by most general liability insurance policies. If the oil tank for your heating system leaks and pollutes your neighbor’s well, there is no coverage.

Directors’ and officers’ policies also have pollution exclusions.

Your property insurance is also likely to have an exclusion for damage to your property caused by pollution—either your pollution or pollution caused by others.

The only exception to the above is for the cleanup of pollution on your premises caused by a peril included in your property insurance. Coverage is usually limited to $25,000.

For bankers, an issue can be pollution at foreclosed locations. Key take away… You probably have no coverage.