Construction Insurance and Environmental Liability Concerns

As federal and state regulators have increasingly instituted more stringent environmental regulations, many industries, particularly those in the construction, are finding themselves subject to greater environmental liability exposures and related financial losses. It is therefore imperative to have a proactive approach to the risk analysis, as with any potential exposures, in order to better evaluate risk control and risk transfer options.

Potential environmental liability concerns can prove to be costly to contractors in the state of Connecticut. Environmental issues are often a roadblock to project development and construction, especially when unexpectedly encountered during project construction. Environmental issues represent an impediment and a financial drain.

Recognition of potential environmental concerns in a project’s planning stages is the best risk management tool you have at your disposal, but it is not a substitute for having construction insurance in CT., which covers environmental liability. However, even with the best planning, unexpected environmental issues may arise at anytime during a project. Though the exposures are many, some common concerns include:

  • Sick Building Syndrome, i.e. carbon monoxide, mold, or bacterial air releases from faulty heating, ventilation or air conditioning systems
  • Construction debris containing hazardous materials
  • Hazardous chemical storage, and
  • Inadequate containment for hazardous materials, waste, and process areas, and at loading/unloading areas

From your perspective, the best approach is to be well educated and prepared to properly react when environmental problems appear on a job. As the contractor, you will need to know in detail the full scope of your responsibility and have a complete understanding of any regulatory requirements and hurdles. Only then can you understand the time and money involved with working with the regulatory agencies in the assessment and the disposal phases.

External pressures to address environmental impairment of commercial real estate (store fronts, strip centers, malls, offices) continues to mount due to the pressure applied by financial institutions to protect loans. You should take the time to speak with an agent about construction insurance in CT., particularly environmental liability coverage.