Pollution Legal Liability (PLL) is a type of Environmental Liability Insurance used for insuring real estate. PLL typically covers third-party claims for bodily injury and property damage resulting from a pollution condition on, under, or migrating from, onto, or through an insured location.
Coverage is also provided for onsite cleanup resulting from both first- and third-party claims. Pollution condition definitions can be broadened to include risks such as mold and legionella, meth labs, and illicit abandonment. Coverage enhancements such as Transportation (first- and third-party), Business Interruption (first- and third-party), Non-Owned Disposal Sites, and Legal Defense are also available.
Coverage can be written for a single location, entire portfolio, select locations, and divested locations. Generally speaking, economies of scale work in your favor, meaning the more locations covered, the lower the cost per location.
Coverage is written on a claims-made and reported basis. Therefore, policies only pay claims presented during the policy term or within an established extended reporting period after the policy’s expiration. Coverage is available for both preexisting and new pollution conditions.
Limits depend on your overall risk tolerance, history of the property, its location, and planned future use. Although this narrative is starting to change, environmental claims tend to be characterized as “low frequency” and “high severity.”
If the worst-case scenario happens, these claims can be costly. Primary limits are commonly available up to $25 million per pollution condition and $25 million aggregate, and unsupported excess is also available in the marketplace if there is interest in higher coverage limits.