The risk of causing pollution that legally damages others, their property, or triggers action by government has become a serious threat to all types of businesses. The list of what is considered to be a pollutant has grown to the point where there are jokes about everything being a pollutant. Some items have gained a pollutant status after years of common use. Think of asbestos for example.

As the risk of pollution was expanding, insurance companies began to develop special pollution policies and began to restrict coverage under the Commercial General Liability Policy (CGL). Insurance operates based on what prior experience indicates losses will be in the future. No one knew how big the pollution risk was going to be and, of course, the premium structure for the CGL did not take into account what an insured would have to pay for pollution coverage. Thus began the restriction of pollution coverage in existing liability policies.

Pollution Exclusion: It's Black & White

The current edition of the ISO CGL has pollution coverage narrowed down to a few covered occurrences. These may include:

• certain off-premises exposures
• certain product-completed operations
• smoke, fumes, soot, vapors from your heating equipment or from a fire in your building
• gas or fumes from materials you bring into a work site.

One CGL pollution situation left by the exclusion is liability coverage for fuels, lubricants, and other fluids used to operate mobile equipment.

What are the solutions to the pollution insurance question? A specific CGL form or a separate Pollution Liability Policy.