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Excavation & Grading Contractor Environmental Liabilities

In the following case histories, the environmental exposures take a variety of forms. These examples demonstrate just some of the many ways in which excavation and grading contractors can incur environmental liabilities.

Contaminated Soil

An excavation/grading contractor unknowingly spread petroleum contaminated soil across a project site during fill operations for a housing project. The contractor was named in a lawsuit for exacerbating the extent of contamination. After lengthy deliberations, the contractor spent $250,000 in cleanup costs and his defense.

Costly Cleanup

An excavation contractor stockpiled soil on an adjacent property. The scope of the project included excavation of 357 feet of trench for one week at a cost of roughly $30,000. Prior to completion of the work a dioxin was discovered in the soil. The US Environmental Protection Agency investigated the situation and issued an administrative order finding the contractor and their client responsible for contamination of the adjacent property. Government-mandated cleanup costs exceeded $250,000.

Raw Sewage Contaminates Wells

An excavation contractor was subject to defense costs exceeding $25,000, in addition to property damage and bodily injury claims exceeding $400,000 from a residential community. During sewage installation, a subcontractor improperly tied in piping. This caused raw sewage to migrate into the underlying groundwater and contaminate residential wells.

Ruptured Pipeline

An excavation contractor was subject to cleanup costs and business interruption expenses in excess of $500,000 when they ruptured an unmarked petroleum pipeline. The contents were released into the subsurface soils and groundwater because of the contractor's inadequate response to the rupture.

Waste Contains Contaminants

An excavation contractor was responsible for a portion of the cleanup costs at a landfill after the material they discarded contained a variety of contaminants, including asbestos. Even though the contractor was unaware that the material was contaminated, the landfill filed suit against the contractor for improper classification and disposal of waste material.

The examples above are intended to illustrate the wide variety of environmental exposures faced by institutions, business and industry and the many ways in which those exposures can arise. Insurance coverage in any particular case will depend upon the type of policy in effect, the terms, conditions and exclusions in any such policy and the facts of each unique situation. No representation is made that any specific insurance coverage would apply in the above examples. Please refer to the individual policy forms for specific coverage details.

COMMON ENVIRONMENTAL EXPOSURES FOR EXCAVATION & GRADING CONTRACTORS

Operational Exposures

• Excavation through and spreading of unknown pre-existing contaminated soil
• Impacting underground utility lines and other underground structures (and associated business interruption exposure)
• Disturbing naturally occurring asbestos
• Release of oils/fuels as a result of vandalism
• Spills of chemicals and fuels (e.g., mobile refueling tanks, etc.) brought on-site
• Lubricant oils and other fluids from field equipment
• Impacting groundwater from drilling and excavation work (e.g., dewatering operations)

This list is intended only to outline some typical environmental exposures common to excavation and grading contractors and is not all-encompassing.