Celebrating 25 years of Insurance and Risk Management Service to Community Associations

Environmental Impairment Liability Coverage

If your association is faced with a pollution claim, are you covered? In response to a dramatic increase in pollution claims, many insurance companies have completely removed pollution coverage from their policies. This valuable protection is available from CAU. Environmental Impairment Liability provides protection against the following risks of financial loss:

  • Bodily injury caused by pollution conditions;
  • Property damage, including damage to tangible property, the loss of use of such property that has not been physically injured or destroyed, and the diminished market value of a third party’s property;
  • Remediation expenses, including investigating the extent and nature of the pollutant, monitoring, removing and disposing of the pollutant; and
  • Defense costs incurred in the investigation, adjustment settlement and defense of a claim.

You may not believe your association has an exposure to pollution liability claims. Consider these claims situations:

  • While excavating to make pipe repairs, a previously unknown underground storage tank is discovered. Investigation reveals that the oil leaking from this tank has contaminated the soil and groundwater onsite and has migrated to a neighboring community. The preliminary studies to determine the extent of contamination cost over $30,000. The clean up cost exceeds $175,000.
  • An association routinely applies phosphorous rich fertilizer to the community’s lawns. During a heavy rain, the phosphorous is washed into a pond on a neighboring property. This overdose of phosphorous nutrients in the pond causes an algae bloom and severely harms aquatic life. Property damage and clean up costs exceed $55,000.
  • Residents of a group of association buildings exhibit an unusually high rate of cancer related symptoms. It is discovered, for the first time, that their buildings are on the site of a former lighting fixture manufacturer that used polychlorinated biphenyls (PCBs), a suspected carcinogen. Large quantities of PCBs are found in the soil under and around the affected buildings. Clean up costs will top $200,000 and many lawsuits are now pending from the affected parties. Bodily injury awards may exceed $1 million.
  • In one community, high levels of lead are found during routine blood tests in children. Investigation of the matter reveals that these children have all regularly participated in activities in the community playroom. Tests showed the presence of lead based paint in the community recreation building. Lawsuits for bodily injury are filed against the association. Settlements with the claimants will exceed $2,000,000.

We offer this unique protection on a claims made policy form. There are only a few carriers providing environmental impairment liability and unlike most of them, we include coverage for prior acts, providing, of course, you had no knowledge of the pollutants when coverage was placed into effect. Let CAU help you secure protection against these types of pollution conditions.