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Street/Road 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 street/road contractors can incur environmental liabilities.

Damaging Dust

A subcontractor working for a street/road contractor performed abrasive sandblasting on a bridge. The bridge was located near a residential area. Lead paint chips and dust from the sandblasting became airborne and migrated onto residential properties, requiring cleanup. The residents filed property damage claims against the street/road contractor for the dust generated by the subcontractor. The claims totaled $400,000.

Claim Denied

A street/road contractor was subcontracted to pave a parking lot for a new commercial structure. At the end of the day, the tack coat was sprayed onto the sub-base prior to paving. During the evening, a major thunderstorm caused the tack coat to wash off and flow into a nearby stream. The general contractor was responsible for cleanup costs which exceeded $200,000. To recoup these costs, the general contractor withheld the subcontractor's payment. In turn, the subcontractor filed a claim with its insurance company to recover lost revenue. The insurance company denied reimbursement based on the absolute pollution exclusion under the general liability policy.

Vandals Cause Fuel Release

A street/road contractor was subject to $35,000 in cleanup costs after vandals opened an on-site mobile refueling tank. Approximately 250 gallons of diesel fuel were released to virgin soils. Fortunately, the groundwater was not impacted by the release.

Groundwater Contamination

A street/road contractor was constructing a road in an area where the water table was extremely close to the surface. This required the contractor to perform de-watering operations. After wells were drilled and groundwater was extracted, the contractor smelled petroleum in the groundwater being extracted. The contractor was unaware that a leaking underground tank near the project site had impacted the groundwater. The contractor was forced to clean up both soil and groundwater because he had exacerbated the extent of contamination by pulling the contaminated groundwater underneath the site.

Ruptured Pipeline

A street/road 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.

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 STREET/ROAD CONTRACTORS

Operational Exposures

• Disturbing naturally occurring asbestos
• Release of oils/fuels as a result of vandalism
• Site preparation/excavation work through preexisting contaminated soil (e.g., petroleum contamination from fuels)
• Residual lead from leaded gasoline and lead chromate (the pigment in paint used to line the roads) on the sides of roads
• Spills of chemicals and fuels (e.g., mobile refueling tanks, etc.) brought on-site
• Lubricant oils and other fluids from field equipment
• Release of fuels/primer oils/tack coat as a result of over-application
• Spills and application of asphalt from site operations
• Impacting groundwater from drilling and excavation work (e.g., dewatering operations, etc.)

• Inadvertent transport and subsequent disposal of unknown contaminated soil
• Spills of contents (e.g., fuel, asphaltic cement, etc.) during transport
• 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 street/road contractors and is not all encompassing