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Q: What is Pollution Insurance?

A: Pollution Insurance (also known as environmental insurance) provides coverage for loss or damages resulting from unexpected releases of pollutants that are excluded (or limited) in general liability and property insurance policies. The losses and damages covered apply to claims against insureds for bodily injury, property damage, pollution cleanup costs, and business interruption.

Q: Doesn't my Farm Insurance policy cover pollution incidents?

A: In some cases, yes, but not all pollution incidents are covered under a vehicle and farm insurance policy. This could put farmers at risk for having to pay for damages out-of-pocket, whether you own a dairy, grain, or vegetable farm. For peace of mind, a Pollution Insurance policy is recommended to fill in the gaps that a Farm Insurance policy doesn’t cover.


Q: Who needs Pollution Insurance?

A: Many types of companies are capable of causing damage or injury involving incidents with contaminants. Whether you choose to obtain a Pollution Insurance policy depends on how much risk you’re willing to take.


Q: Does my farm need a Pollution Insurance policy and what does it cover?

A: If you own a farm, chances are an accident involving some sort of risk to the environment could arise. Some, but not all pollution incidents are covered under your vehicle and farm insurance policies. Events such as an overturned truck of milk or manure that spills into a nearby stream or field causing damage to water and wildlife, or if your chemical barn catches on fire, you could be paying for damages and cleanup costs for spills out of pocket. A Pollution Insurance policy can close these types of gaps in your coverage.


Q: What is considered a pollutant with regards to insurance?  

A: Pollutants are any materials or substances that end up somewhere they weren’t intended to be used. Things like hazardous waste is an obvious pollutant, but on a farm things like milk, manure, and pesticides can be considered pollutants.


Q: How are prices determined for Pollution Insurance?

A: Factors in determining the cost of Pollution Insurance includes on the size of the farm, the risk involved, the amount of coverage your farm needs, deductibles, and whether or not you’re eligible for discounts.


Q: What does Pollution insurance cover?

A: A standard Pollution Liability Insurance policy covers claims for bodily injury, property damage, business interruption, crisis management, transportation liability, as well as clean-up costs associated with the toxic materials. This means if any hazardous waste materials you work with, store, or produce caused any injuries or damage to a third party, land, or wildlife, the insurance policy would pay for the damages, medical bills, and associated legal fees.

Q: What might not be covered on my Pollution Insurance policy?

A: Every insurance carrier and policy may have different exclusions, so you’ll want to make sure that you are covered for whatever line of business you have. Some common exclusions are:


  • Pollution that occurs from an intentional act

  • Asbestos, lead, and mold (these might be added as a policy endorsement or under separate coverage)

  • If the insured has agreed to contractual liability for certain events 

  • Failure to maintain insurance (If your industry is required to retain a certain amount of liability insurance and you fail to do so, fines and penalties are not covered)

  • If a pre-existing pollution involved

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