What you think you need can differ from what you actually need
By Keith Loria
Vehicles that transport workers and chemicals to and from job sites aren’t often front of mind when buying insurance for a pool service, building or retail company. Every business needs general-liability insurance, but it is more important to have the correct insurance coverage.
“We find most pool-related accounts do not have proper coverage,” says Jeannette Blanton-Monnat, vice president/partner with Independent Insurance Group, Inc., in Ennis, Texas. “Insurance is complicated, so make sure you understand what you are paying your hard-earned dollars for. This is especially true for vehicles.” She says that often, a customer is paying a lot so will just assume they are covered for almost everything.
When considering your vehicle coverage, a pool company needs to have pollution and hazardous material cleanup coverage for possible damages and cleanup costs resulting from an accident with pollutants such as the muriatic acid and chlorine they transport to their customers’ premises, or that they store at their own premises, Blanton-Monnat says. “They not only need this coverage on their vehicles due to the cost of cleanup in the event of a spill,” she says, “but they also need pollution coverage for public-liability purposes.”
Ray Arouesty, an attorney and senior vice president for Arrow Insurance Service, a division of HUB International Insurance Services Inc., in Westlake Village, California, notes that coverage is vital because the business’s auto policies offer limited coverage.
“Many auto policies read, ‘There is no coverage for injury or damage arising out of the discharge or release or escape of pollutants’ and then define what pollutants are,” he says. “Pollutants are any acids or chemicals or fumes or vapors or smoke. Many claims arise out of injury involving sodium hypochlorite, and that would not be covered. That’s a real problem when people are carrying these chemicals routinely in the back of an open pickup truck, often not secured.”
Arouesty says he had a client last year whose case involved the cleanup expense of spilled chemicals: A swimming pool tech was rear-ended, and the Diatomaceous Earth (D.E.) he was carrying spilled into the street, Arouesty says. The street was closed and a hazmat team came out. “It’s not a toxic chemical,” he says, “but the pool tech received a bill for $8,000 from the fire department for the cost of the clean up.”
There was no injury or damage from the accident, so the claim wouldn’t have been covered under a standard vehicle insurance policy. There are two ways to cover something like that, he says: A separate pollution-exclusion policy or on a general-liability policy.
Arrow Insurance Services offers a special general-liability policy that pool service techs carry, which extends coverage to these chemical-related issues. The policy contains a rider that covers pollution, so if someone is hurt by the inhalation of chemicals, he or she would be covered. It also covers hazardous cleanup, even for a car accident.
While a general-liability insurance policy covers the payment of damages, it also covers legal defense coverage in case a company is taken to trial.
Arouesty remembers a rear-end truck accident in San Diego from about 15 years ago where a pool-service company was transporting chemicals. Chlorine and muriatic acid were inadvertently mixed, and a toxic cloud obstructed the area, causing a large semi truck to lose visibility and crash into stopped traffic. That led to more damage — and a fatality.
“It was a million-dollar settlement,” he says. “If an insured is sued, the policy provides legal counsel, and that’s typically unlimited. Someone can be involved in a lawsuit even without being at fault.”