Unfortunately, the environmental liability insurance market faces limited regulations because many places consider them excess. Therefore, reviewing a policy offer is essential before selecting it. If you evaluate these based on costs, deductibles and limits alone, you could end up with a poor match for your needs.
To avoid picking the wrong policy, look for the following features when shopping.
Essential coverage
In New Jersey, you need environmental liability insurance that covers losses related to escaping pollutants. That means it must cover the following:
- Injuries
- Property damage
- Cleanup costs
- Court costs
Before purchasing any policy, make sure you get at least these features.
Optional coverage
While not mandatory, you might also want your policy to cover waste disposal sites, pollutant transportation, business interruption, rent loss, extra expenses and reputation damage. Some policies might even offer coverage for your midnight dumping activities, bacterial and fungal pollutants, fungal and bacterial cleanup costs and repairing reputation damages.
Environmental impairment liability
This type of coverage applies to locations that you list out. It covers cleanup costs, business interruption, rent loss and other extra expenses. This type of policy is critical for you if you have commercial buildings with inhabitants.
Contractors environmental liability
This type of coverage applies to covered events that generate pollutants. When you use this type of insurance, you can outline what activities you will engage in that could produce pollutants, which the insurance company will write into your contract. When generating its policy, the company will also factor in the number of gross dollars these activities generate.
Keep an eye out for these characteristics when purchasing environmental liability insurance. Failing to do so could leave you with little coverage and high out-of-pocket costs.