Trends and Hot Topics Safeguarding Your Construction Projects: The Significance of Certificates and Pollution Coverage in Insurance

By Girard R. Visconti

Typically, contractors and subcontractors carry Workers’ Compensation coverage, automobile liability, and commercial general liability, which includes products/ completed operations, contractual liability, umbrella and other coverages. Ordinarily, general liability insurance coverage may exclude pollution coverage. Therefore, contractors and subcontractors should consider adding pollution coverage to their package of insurance. For example, if a contractor or subcontractor is working on a mechanical system and for some reason oil “spills” from oil lines and damages or infiltrates into subgrades, flooring, carpets, water, etc., that damage may not be covered unless the contractor or subcontractor carried pollution insurance.

Therefore, in the event that any of your work may involve oil, gas, asbestos, demolition, blasting, spraying, etc. where “pollutants” are used or your scope of work includes any contact with oil, gas, etc., it may be prudent to carry pollution coverage.

It is imperative to have your insurance agent review your insurance needs per your specific scope of work. “Certificates of Insurance” are commonplace in construction contracts which is “proof” of coverage of a contractor or a subcontractor. Certificates of Insurance, when received, should be reviewed in detail, including types of coverage, limits of liability, expiration dates, etc.

It is important to have the party who is requesting coverage to be named as an “additional insured,” since in the event of a lawsuit against the requesting party, that party will mostly likely be defended by the vendor’s insurance carrier, if there is in fact coverage. All Certificates of Insurance should have an “additional insured endorsement” attached to the certificate for proof of additional coverage.

In addition, office staff should review the certificates periodically to determine whether or not the expiration date is close at hand and if that is the case, request a revised certificate.

Girard R. Visconti, Esq. is partner at Savage Law Partners, LLP.