Devoted Guidance From Resourceful Lawyers

How is my business going to pay for a cleanup?

On Behalf of | Sep 20, 2021 | Business Law

No business wants to get a communication from a government agency or other business suggesting that the first organization is responsible for an environmental cleanup.

Doing a proper pollution cleanup can cost millions of dollars, especially if there are also legal disputes entangled within the process.

Big environmental claims can hurt the bottom line of even the largest California companies, and they can be financial killers for small and mid-sized businesses in the San Diego area.

Prevention is almost always preferable to having to defend against a lawsuit related to pollution. Still, despite their best efforts, some businesses will still be on the receiving end of environmental litigation either at the hands of a private party or a state or federal government agency.

Businesses may be able to look to the insurance carriers for coverage

As part of their risk management plan, many businesses will therefore purchase pollution liability coverage from one or more insurance companies.

Like other types of insurance, the idea is that the business will only pay a manageable amount on a pollution claim, with the insurance carrier covering most of the potentially crippling costs and expenses.

The number of industries that should consider pollution coverage is surprising. In addition to manufacturing, dry cleaning and other industries with known pollution risks, those in construction and even transportation may also purchase this type of coverage.

For example, those who perform construction work on older buildings may have obligations to safely remove and dispose of asbestos.

Unfortunately, sometimes insurance carriers refuse to pay pollution claims that they should pay under the terms of the policy.

In other cases, a company may find that, because of an insurance agent’s or broker’s mistake, there were gaps in pollution coverage which prove very costly to the business.

San Diego businesses in these situations should consider their legal options carefully.