Coverage for Limited Pollution Removal

Let’s examine a typical definition of pollution as included in a standard policy contract. “Pollutants” are usually defined in language such as the following: any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed.

How do pollutants get onto self-storage sites? There have been isolated incidents of tenants operating methamphetamine labs out of or storing the chemicals used in the production of such drugs in their units. Both the drugs and the raw materials are extremely toxic.

This is an extreme example of pollutants, but there are many more that are far more innocent. Tenants may store items such as paint or cleaning products in their spaces, posing an environmental hazard that would technically fit the definition of pollutants as spelled out in the insurance policy. Because a facility owner can’t sufficiently police his tenants to prevent the storage of such items, limited pollution-removal coverage is essential for handling accidental spills.

Without resorting to legalese, let’s examine the coverage available under a typical limited pollution-removal endorsement:

• The coverage is “limited"; it isn't all-encompassing and doesn't provide protection from every form of claim that could be made against the policy.
• The coverage applies to the removal and detoxification of “pollution” only.
• The endorsement modifies coverage according to "Part One, Property in the Select Custom Package" form, which pertains to property coverage and not liability coverage. All the other terms and conditions applicable to Part One of the Select Custom Package form are applicable.
• Further, the coverage usually extends to the affected storage unit only, not to surrounding areas, surface or ground water, or other facilities, and not to other storage units. The endorsement obligates the insurance carrier to pay up to the specified limit of insurance to remove pollutants or otherwise detoxify a storage unit, and only to the extent required by the authorities. Also, the endorsement requires timely reporting, which means you must report the pollutants to your insurance carrier as close in time to the discovery as possible.