A chiller loses its refrigerant, a glycol loop drains or a fuel line leaks diesel. Does our general liability policy pay?

What does exclusion f say?

The form defines pollutants as “any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste”. It does not list substances, so refrigerant, glycol and diesel are not named. Whether a given release counts is decided on that definition and on state law.

For a contractor, the part of exclusion f that matters most is paragraph (1)(d). It removes bodily injury and property damage arising out of the release of pollutants at a site where the insured or its subcontractors are performing operations, if the pollutants were brought to the site in connection with those operations. Paragraph (2) then removes any loss, cost or expense from a demand, order or statutory requirement to test for, clean up, remove, contain, treat or neutralize pollutants.

So two separate costs are in question after a spill: damage to someone else’s property, and the clean-up bill. Paragraph (2) has one qualification. It does not apply to liability for property damage that the insured would have had without the regulator’s demand.

Which exceptions are left, and which endorsements remove them?

How does that apply to refrigerant, glycol and diesel?

These are things to test against your own wording, not conclusions.

• Diesel. The fuel exception is written for fluids needed to operate mobile equipment that escape from a vehicle part designed to hold them. It does not apply to fuel brought to the site with the intent that it be discharged. The form defines mobile equipment as types of land vehicle, including trailers that carry generators. A permanent standby generator and its fuel piping are not described there.
• Refrigerant. A gas released indoors may fall within the exception for gases, fumes or vapors from materials brought into a building for the work. That exception is limited to injury or damage sustained within the building.
• Glycol. A cooling-loop fluid is a liquid, so the exception for gases, fumes or vapors does not describe it, and it is not an operating fluid of mobile equipment.
• Clean-up. The three exceptions sit in paragraph (1)(d). Paragraph (2), on regulator-ordered clean-up costs, is separate and has only the qualification described above.
• Courts differ. A Cozen O’Connor review of the case law found the same substance held to be a pollutant in one jurisdiction and not in another, and sometimes in one setting and not another within a single state.

What is contractors pollution liability for?

Contractors pollution liability is a separate policy for pollution arising from a contractor’s work. The Hartford describes its version as covering environmental damage, property damage and bodily injury for pollution incidents caused by work performed by contractors at a third-party job site, and lists HVAC, plumbing, electrical and utility contractors among the trades it is written for.

Writing in Insurance Journal, Gary Grindle observed that even non-environmental contractors have a need for this coverage, because the standard exclusion already leaves so little. There is no single standard form, so read the policy itself. Points to look for are whether clean-up costs are covered, whether cover is on a claims-made or occurrence basis, whether transport and disposal are included, and whether completed work is covered after you leave the site.

If your subcontract sets a pollution liability requirement in its insurance exhibit, read it for the limit, the basis and how long the cover must be kept after completion.

Where do I look on my own policy?

• The forms schedule of the general liability policy, for CG 21 49, CG 21 55, CG 21 65 or an insurer’s own total pollution exclusion.
• The umbrella or excess policy, which has its own pollution wording that may differ from the primary policy.
• The automobile policy, if you haul fuel, refrigerant cylinders or glycol. CG 00 01 excludes injury and damage arising out of the use of an auto, and says use includes loading or unloading, so a spill from a truck is a question for that policy.
• The insurance exhibit in the subcontract, for a pollution liability requirement.

Related questions

Is refrigerant a pollutant under a general liability policy?

The form does not name it. It defines pollutants as any irritant or contaminant, including vapor, fumes and chemicals. Whether a particular refrigerant release fits is decided on that wording and on the law of the state, and courts have not been consistent.

Does general liability pay for spill clean-up?

Exclusion f removes any loss, cost or expense arising from a demand, order or statutory requirement to clean up pollutants. The only qualification is for property damage liability the insured would have had without that demand.

What is the difference between CG 21 49 and CG 21 55?

Both are ISO total pollution exclusions. CG 21 55 keeps an exception for a hostile fire, as its title says. A third form, CG 21 65, keeps exceptions for building heating, cooling and dehumidifying equipment and for hostile fire.