A construction project does not have to involve building on contaminated land in order to be subjected to potential environmental claims. Most environmental exposures stem from routine construction activities and often are not visible until they become costly problems. It is the responsibility of the general contractor to have an all-inclusive vision of the entire building project and prepare for any environmental concerns that could affect their employees, the public, and the environment.

General contractors often try to shift their environmental liabilities onto their subcontractors by ensuring that they are added onto their subcontractors’ insurance policies as additional insureds. In the case of environmental claims, subcontractor General Liability policies often have sublimits for environmental incidents or time element restrictions, which mean that if there is a pollution event at a construction site, that pollution event must be discovered within a certain time period (ex. 7 days) and reported to the insurance carrier within a certain time period (ex. 30 days). Because many environmental incidents at construction sites take place below ground and are not visible until they impact off-site properties or may not be discovered until workers have completed work at the job site (as in the case of mold, for example), time element restrictions may hinder a general contractor’s ability to access coverage for pollution events. In the worst case scenarios, subcontractor policies may not include any pollution coverage at all.

Environmental management

Because general contractors (as well as property owners) are often brought into claims, lawsuits, or regulatory actions for the activities of their subcontractors, they have to be aware of the environmental problems that might stem from subcontractor activities.

The following are some of the potential environmental hazards that general contractors should be aware of:

• Job site - clearing/site grading/excavation activities - Underground storage tanks could be punctured, materials below ground containing pollutants could be broken open which could result in pollution spills below ground incurring cleanup costs, bodily injury (from contaminated drinking water wells, for example), or third party property damage claims. Storm water may be discharged which often contains pollutants such as sediment, debris, or chemicals transported to local storm sewers, surface waters, or drinking water wells. This can kill fish or adversely affect drinking water quality.
• Job site – releasing contaminants at a job site or brought to a job - Air emissions such as fumes from chemicals (sealants, curing compounds, adhesives, etc.); spills from fuels or lubricants associated with construction equipment; air emissions from construction activities, such as welding (manganese), concrete cutting (silica dust), or combustion engines (carbon monoxide, nitrogen oxides, particulates); release of asbestos particles from asbestos containing materials (ACM) such as insulation, floor tiles, or ceiling tiles; release of lead particles from lead-based paint; release of mold or mold spores from areas where water intrusion has occurred, such as broken pipes or inadequate drainage; releases of chlorofluorocarbons (CFC’s) in air conditioners or refrigeration units; spills of oil used, transferred or stored at construction sites in bulk quantities may result in spills; moving soil that contains hazardous chemicals from one part of the construction site to another or off-site.
• Transportation of waste or materials to or from a job site - Spills may occur while chemicals, waste, debris, or equipment are being transported to or from the job site, or during loading/unloading.
• Disposal of waste at non-owned facilities - Construction debris may be inadvertently mixed with hazardous waste and then disposed of improperly; causing contamination at the landfill or disposal facility they have been taken to. This may result in claims against the landfill or disposal facility which could come back to the original generator (construction entity or construction site owners/operators) of the waste.
• General Contractors Owned premises - Contamination at an owned premises caused by the maintenance or storage of heavy equipment, mobile equipment, or vehicles.