Residential and commercial solar installation contractors should pay attention to the type of insurance coverage they purchase. Although pollution incidents are less frequent and not always immediate, the cost of claims can cripple a company when they occur. Every commercial general liability (CGL) policy contains some form of pollution exclusion. Your agent may work with the insurance carrier to gain back pollution coverage through a policy endorsement, but you should carefully review the endorsement to obtain a better understanding of the pollution risks that remain. Oftentimes, those endorsements provide limited coverage, as demonstrated in the chart below.
| Coverage | Limited Pollution CGL Endorsement |
| Work Performed at a Jobsite | May Not Include |
| Natural Resource Damage | Generally Not Included |
| Asbestos/Legionella/Mold | Generally Not Included |
| Non-Owned Disposal Sites | Generally Not Included |
| Transportation Pollution | Not Included or Limited |
| To verify available insurance coverage, please consult your insurance representative. | |
In many cases, experienced agents will work with a wholesale environmental insurance broker with the expertise to ensure the contractor is covered for the many different types of pollution risks. When reviewing your insurance policy with your agent, here are a few questions you should ask:
1 – Does my policy have a mold or legionella exclusion?
All policy language is different, and each insurance carrier has its own definition of a pollutant. Your agent may provide a standard certificate of insurance (COI) as proof of insurance for a project; however, the COI fails to confirm true pollution liability and does not drill into coverage specifics. As outlined earlier, CGL endorsements typically have limitations and coverage restrictions on pollutants and environmental claims. Coverage for mold or legionella is not evident just by reading the COI. Water intrusion can happen when working on rooftops and cause leaks that lead to mold growth. Legionella can grow in solar-thermal heating systems and cause potentially fatal pneumonia. It is better to confirm coverages so your business does not have to pay out of pocket should there be a claim for pollutants like legionella and mold.
2 – What is my coverage for non-owned disposal sites?
Steve Garell, an environmental wholesale broker for UCPM, said, “By far the most relevant and commonly overlooked exposure in standard general liability policies that I see for my solar contractors is non-owned disposal site (NODS) coverage. Pollution risks usually cannot be transferred away by contract as they are cradle-to-grave exposures. This means that simply contracting for a trusted third-party disposal company is not sufficient to mitigate an insured’s NODS risk.”
Environmental legislation may hold parties liable for the contamination of a disposal site if a release was to be discovered later, even if the waste had been properly disposed of at an approved disposal facility. If a disposal site has environmental problems, federal, state and local regulatory agencies may review the hazardous waste manifests and require all parties responsible for the waste disposal to pay for a portion of the cleanup. While many solar panels do not meet the definition of hazardous waste under the Resource Conservation and Recovery Act (RCRA), some panels may be manufactured with toxic materials like lead, cadmium, sulfuric acid, silica and chromium. It is important to note that on October 23, 2023, the EPA announced plans to change RCRA regulations to include solar panels under universal waste regulations found in Title 40 of the Code of Federal Regulations Part 273. EPA is adjusting these regulations in response to a petition filed in 2021. For questions regarding compliance with applicable laws or regulations, please consult your local or state regulatory authority.
A thorough review of your operations to identify and mitigate risks is a healthy exercise for any business owner. All businesses face the odds of disturbing existing pollutants or creating a pollution incident. You should protect your company and employees from workplace hazards. Some insurance agencies have dedicated risk management departments to help establish a curriculum to manage a safer work environment.
As evidenced by the proposed changes to RCRA, the management of environmental risks continues to evolve. Owners need to proactively manage the environmental risks associated with their business operations. Environmental risks have historically been overlooked and left unaddressed until after a pollution incident occurs, but there is a certification program that helps identify and mitigate environmental risks for the construction industry. Certified Environmental Responsible Contractor (CERC) recognizes companies that carry pollution coverage and train employees on environmental best practices. CERC streamlines the procurement process and ensures the hiring of competent, trained and properly insured contractors. As part of the certification process, insurance policies are reviewed for the following provisions:
- First- and third-party transportation pollution liability coverage
- Blanket primary and non-contributory
- Contractors pollution liability (CPL) policy with $1 million limit minimum
- Natural resource damage coverage
- No mold exclusion
- Non-owned disposal sites (NODS) coverage
- Includes coverage for both sudden and accidental and gradual pollution releases
Companies that want to get certified are also required to train employees on pollution prevention practices. The training resources include information on specific environmental exposures and provide best practices on how to mitigate them. Training topics include but are not limited to asbestos, cargo securement, hazardous waste management, illicit abandonment, lead-based paint, legionella, mold, responding to spills, solid waste management, universal waste management, scrap metal recycling and fugitive dust control.
Jenna Neumann, president of solar installation contractor iVee League Solar, said, “iVee League Solar is grateful for the CERC certification, which has been instrumental in providing us with practical tools to enhance our business operations and foster a commitment to sustainable practices. The certification has empowered us to prioritize the safety of our employees, customers and the successful execution of our projects. We highly value the expertise and support received through the CERC certification, which has helped foster a culture of excellence within our organization.”
Darren Berg is the President of Environmental Risk Professionals. Berg is an accomplished environmental engineer with over 25 years of diverse experience in environmental consulting for federal, state, and private clients. His areas of expertise are site investigation and remediation, RCRA (Resource Conservation and Recovery Act), hazardous waste management, regulatory compliance, and Phase I/II environmental site assessments. He has a Bachelor of Science in Environmental Engineering from Northern Arizona University, has been OSHA 40-hour HAZWOPER trained, and is a graduate of the Leadership in Engineering Administration Program through ACEC.
Environmental Risk Professionals is a team of highly experienced risk professionals determined to help contractors and other business owners minimize pollution claims. Through Pollution Prevention Practices, Operation and Maintenance Plans, and other services, Environmental Risk Professionals helps businesses understand their risk exposure and mitigate potential claims and effects on the environment.
