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Mechanical 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 mechanical contractors can incur environmental liabilities. Mold Growth In HVAC System A mechanical contractor installed a heating, ventilation, and air conditioning (HVAC) system in a new commercial office building. After three years,
mold and mildew growth caused the release of airborne bacteria throughout the entire building resulting in poor indoor air quality. Claims against the contractor for bodily injury and loss of property use exceeded
$500,000. In addition, the contractor was responsible for decontaminating the HVAC system. Dust From Lead Removal Clogs HVAC A mechanical contractor removed lead based paint from a
commercial building. The contractor isolated the work areas with containment, but the HVAC system was not disconnected. Dust generated from lead removal operations clogged the heating coils in the building's HVAC
system. The contractor was liable for replacing the HVAC system, as well as business interruption claims totaling $150,000. Fuel Release While a mechanical contractor was repairing
leaks on fuel lines at a shipyard, an unknown party opened the valve that separated the inactive lines under repair from the active lines. Fuel began to flow through the lines under repair, releasing 3,500 gallons of
gasoline. The cost to clean up soils and groundwater contaminated by petroleum hydrocarbons was $500,000. Mercury Spill A mechanical contractor was dismantling laboratory piping at a
university when he inadvertently spilled mercury. The result was building-wide mercury contamination. The contractor spent well over $350,000 to clean up the spill. 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 MECHANICAL CONTRACTORS Operational Exposures
- Completed operations exposures including incomplete HVAC system hook-up, improper system construction or unbalanced systems causing condensation and air quality problems
- Fumes, emissions and spills from chemicals utilized during construction (finishers, sealants)
- Heating, ventilation, air conditioning (HVAC) construction or maintenance errors causing release of airborne bacteria or fungus
- Incidental exposure from asbestos-containing building materials
- Lead paint on pre-existing structures (welding, etc.)
- Lubricant oils and other fluids from field equipment
- Release of oils/fuels as a result of vandalism
- Sprinkler system error or shut-off allowing potential toxic fire to spread
Owned Premises Exposures (maintenance garages, offices, fabrication shops, etc.)
- Soil/groundwater contamination from:
- Leaking underground/aboveground storage tanks
- Residual contamination from minor spills of oils, fuel, lubricants, etc., and poor housekeeping
- Surface contamination from fuels and lubricants stored improperly (without secondary containment)
- Improper disposal of waste materials
- Unidentified, pre-existing contamination from past owners of the premises
Transportation Exposures
- Inadvertent transport and subsequent disposal of unknown contaminated materials
- Resulting pollution from collisions with various structures (e.g., pole mounted transformers, aboveground tanks, etc.)
- Fuel/oil spills/leaks from vandalism
This list is intended only to outline some typical environmental exposures common to mechanical contractors and is not all-encompassing.
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