Contractors

Demolition

Demolition operations, including structural dismantlement, site clearance, salvage, environmental remediation, and industrial recovery, can cause conditions that lead to environmental exposure. The dismantling and removal of building materials can create hazardous dust or inadvertently disturb existing asbestos, lead, or mold within the structure, which could expose third parties to hazardous and disease-causing materials. Demolition work may also impact utilities or building systems that can cause leaks that impact soil, groundwater, and air emissions. Hazardous materials may also be present in waste collected at the jobsite and require special disposal procedures. Improper handling and transporting of hazardous waste can create additional environmental liability.

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Environmental Exposures May Include:

Lead
Demolition Activities
Hazardous Wastes
Asbestos
Wallboard Removal
Mold
Hazardous Waste

Lead

Demolition operations, including structural dismantlement, site clearance, salvage, environmental remediation, and industrial recovery, can cause conditions that lead to environmental exposure. The dismantling and removal of building materials can create hazardous dust or inadvertently disturb existing asbestos, lead, or mold within the structure, which could expose third parties to hazardous and disease-causing materials. Demolition work may also impact utilities or building systems that can cause leaks that impact soil, groundwater, and air emissions. Hazardous materials may also be present in waste collected at the jobsite and require special disposal procedures. Improper handling and transporting of hazardous waste can create additional environmental liability.

Demolition Activities

Demolition activities can impact utilities, like electrical transformers, gas lines, water and sewage pipes, and above- and below-ground tanks (such as fuel and septic tanks). The accidental release of fuel oil, chemicals, toxic gases, or sewage from broken pipelines, utilities, and stationary and mobile tanks can contaminate soil and groundwater and release hazardous air emissions.

Hazardous Wastes

Hazardous wastes commonly found in demolition projects include asbestos-containing materials, lead-based paint, lead pipe and solder, fluorescent tubes and bulbs, mercury switches and thermostats, paints, solvents, pesticides, PCB-containing transformers or light ballasts, PCB-containing paint or caulking, radionuclide-containing smoke detectors and exit signs, and refrigerants from air conditioning units.

Asbestos

Asbestos removal or disturbance may occur in many residential, commercial, and industrial applications, including ceiling and floor tiles, heating duct insulation, thermal pipe insulation, and roofing materials. During demolition, existing asbestos could be disturbed, and inhalable fibers could be released, exposing third parties to serious health hazards or fatal diseases such as asbestosis, lung cancer, mesothelioma, and other cancers.

Wallboard Removal

Removal of wallboard, insulation, and other dry building materials can release dust containing allergenic or disease-causing compounds, including crystalline silica. Often referred to as fugitive dust, emissions from demolition operations may escape from the protected area or contaminate existing ventilation systems, becoming respirable to third parties and exposing the contractor to tort liability.

Mold

Mold may be encountered in non-visible areas such as insulation materials, attics/roofs, conduit traces, crawlspace conduits, basements, behind wallboard, under carpeting, in pump or filter housings, and piping/duct runs. When mold-impacted areas are disturbed, small spores and fragments are readily released. These mold particles will disperse further and expose building occupants without careful containment and cleanup. Exposures may result in respiratory allergies and asthma, flu-like symptoms, COPD complications, and severe preeclampsia. Failure to identify, dry, or remove all moisture-impacted building materials allows for continued or subsequent mold growth, leading to additional property damage and health issues.

Hazardous Waste

Hazardous waste requires proper handling and disposal procedures. When collected at a jobsite, it must be properly segregated, or it can accidentally get mixed with non-hazardous waste and be improperly disposed of. When an investigation for improper disposal occurs at a disposal facility, it can result in potential liability for all parties that manifested waste to the facility. Waste container breaches or improper handling of hazardous waste may also result in releases during loading, unloading, and transportation.

Contractors Pollution Liability Can Provide Coverage For

  • Contracting operations completed “by or on behalf of” the insured
  • Contracting operations performed at a jobsite
  • Third-party claims for bodily injury and property damage
  • Third-party claims for cleanup
  • Defense of third-party claims
  • Asbestos and lead
  • Mold, fungi, legionella, bacteria, and viruses
  • Sudden and accidental coverage for owned/leased locations
  • Non-owned disposal site liability
  • First and third-party transportation pollution liability
  • Loading and unloading
  • First-party emergency response costs
  • Natural resource damage
  • Silt and sedimentation
  • Claims Scenarios & Examples

    While working to remove lead-based paint from a commercial building, a demolition contractor isolated all the building areas where work was being done, but the HVAC system was left intact and running. As a result, dust from the work entered the HVAC system and clogged the heating coils. The contractor was required to pay to replace the HVAC system and business interruption expenses for the building. They faced claims of $550,000.
    A demolition contractor was using torches to dismantle a bank vault. The dust and fumes from using the torches entered the ventilation system, causing the medical clinic on the floor above to evacuate. The contractor faced bodily injury, property damage, and business interruption claims.
    A contractor was hired to demolish a building and dispose of construction debris waste. Although the contractor was told that all asbestos had been abated, it was later discovered that some construction wastes contained asbestos and were disposed of at a local solid waste landfill. The state fined the contractor and required them to perform a cleanup at the landfill.
    During demolition activities at a redevelopment project, an unknown heating oil tank was punctured, releasing residual heating oil into the subsurface. Due to sandy soils and a shallow groundwater table, the oil spread quickly. Although the tank was only 500 gallons, the cleanup became very involved due to the required excavation of impacted soils and the regular groundwater monitoring until the environmental regulators could grant closure. Remediation and project delay costs exceeded $750,000.
    While working on a building renovation project, the contractor removed asbestos-containing materials. Although they didn’t know that asbestos was present, the Environmental Protection Agency required an emergency response to the release. The project was put on hold until the asbestos was completely and properly removed and disposed of.
    During concrete demolition, a contractor mistakenly pumped cutting fluid into a storm drain. The drain fed into a retention pond and caused contamination. This resulted in cleanup costs and lab analysis expenses.
    During the demolition and renovation of a top floor of the complex, dust was released throughout the building, with lead concentration up to 210 times higher than what is considered safe. The lead was released when the containment system used during lead-based paint removal failed.
    After experiencing a great deal of rain, a construction pit at a demolition site was filled with rainwater and mixed with concrete dust. The pit overflowed into a storm drain and a nearby stream, resulting in a fish kill. Testing of the creek indicated that areas had high pH and conductivity levels. This was believed to be from lime, often present in concrete dust and debris, which increased the water alkalinity and resulted in burns of fish bodies, gills, eyes, and organs.
    During construction activities, a demolition contractor was using a crane to lift pieces of a structure that was being dismantled. The crane overturned, rupturing its hydraulic hoses and spilling all its fluid onto the ground. The contractor was required to pay cleanup costs from the spill.

    Final Consideration

    As a contractor, you can be faced with the cost to defend yourself against allegations or legal action from pollution-related events, regardless if you are at fault or not. Having the proper insurance coverage in place will help fund the expenses incurred to investigate or defend against a claim or suit and provide you with environmental claims handling expertise.

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    This environmental risk overview offers a general understanding of potential risks and may not reflect all risks associated with your business. Environmental Risk Professionals has compiled this overview for informational purposes only. This overview does not constitute legal opinion or advice, nor does it establish a consultant-client relationship. This overview is not intended to guide project parties in interpreting specific contracts or resolving disputes; such decisions may require consultation with counsel and depend on various factors. © 2025 Environmental Risk Professionals, LLC