For many businesses, environmental risk still feels like something reserved for heavy industry - chemical plants, large manufacturers or energy operations. Despite those misconceptions, environmental exposures cut across nearly every sector - and the assumptions companies make about their insurance coverage can be dangerously outdated.
At a time when even a small spill can escalate into a six-figure liability, insurance leaders warn that these misconceptions around what General Liability (GL) actually covers remains one of the most persistent and costly gaps in the market. In a recent interview with Insurance Business, Eric McCabe, Divisional Senior Vice President for Great American Insurance Group Environmental, revealed that he’s seen misunderstandings surface repeatedly.
“Many businesses assume their GL policy covers environmental risks - but that can be a costly mistake. Early GL forms lacked clear pollution exclusion language, and courts often ruled in favor of insureds, creating massive liabilities that nearly ended GL coverage.
“Today, standard GL policies include broad pollution exclusions, leaving claims from spills, mold or routine pollutant releases uncovered. These gaps expose companies to remediation costs, regulatory fines and third-party claims for bodily injury and property damage. Even low-risk industries can face six-figure expenses from a single spill or other release.”
One answer to these coverage gaps lies in the growing adoption of combined GL and Pollution policies, a solution that brings both coverages under one carrier and one coordinated approach. Becky Biermann, Environmental Casualty Practice Leader with Great American Environmental, is leading the launch of GLIDER, the organization’s new combined GL and Site Pollution product. The market’s interest, she told IB, is driven by the increasing frustration companies face when they discover too late that traditional GL policies won’t respond to environmental claims.
According to Biermann, a combined policy solves that problem by eliminating fragmentation. A unified product “closes the gaps created by the absolute pollution exclusion in standard GL coverage - while delivering the simplicity of the ‘one roof’ concept.”
And, by integrating both coverages under one policy and carrier, businesses gain a unified claims process, consistent terms and faster resolutions.
“There’s no juggling multiple carriers or conflicting definitions,” added Biermann. “Just streamlined communication and coordinated expertise. Plus, enhancements like emergency response, biological hazard cleanup, first-party business interruption and diminution of property value work seamlessly together, ensuring comprehensive protection without overlaps or gaps.”
McCabe went on to stress that many sectors underestimate just how exposed they are. As he told IB, while most people associate environmental risk with high-hazard industries, the reality is far more expansive.
“Environmental exposures are not limited to traditionally high-risk sectors; they can affect a wide range of operations, often catching businesses off guard when a pollution-related claim arises.”
Operations such as recycling centers, warehouses, distribution facilities, and businesses with storage tanks or drums, and those that process, store or transport chemicals as well as manufacturers producing paints, pigments, plastics and metals - all, McCabe explained, “have potential to face substantial environmental liabilities.”
For brokers, introducing environmental coverage can be challenging –especially when clients believe their GL provides enough protection. McCabe recalled one broker’s humorous icebreaker:
“A broker once told me they’d place a plunger on the table before starting the conversation. Then they’d say, ‘Pollution insurance is like this plunger - you don’t need it every day, but when you do and don’t have it, you’ll be knee-deep in a mess you’d rather avoid.’”
Humor aside, Biermann revealed the most effective strategy really is operational discovery.
“Ask if they store chemicals, transport materials or manage waste,” she told IB.
These simple questions quickly reveal exposures that “a standard GL policy won’t touch.” Biermann notes that real incidents - “spills, contamination, operational mishaps or even mold growth”, regularly lead to bodily injury, property damage, costly remediation, regulatory penalties and reputational harm.
And when clients see what integrated coverage truly provides, she says the value speaks for itself.
“The solution? Integrated coverage under one policy and one claims team. It simplifies claims handling, eliminates gaps and provides specialized expertise when it matters most. When clients see that this approach delivers protection - not just a price - and helps them achieve peace of mind, they understand why it’s essential.”
Great American Environmental is a trusted leader in environmental risk management. Comprised of seasoned experts, the division specializes in uncovering hidden environmental exposures within client operations and designing customized insurance programs that provide robust protection. Coverage spans a wide range of commercial operations—addressing both new and historical conditions, on- and off-site risks, and gradual or sudden events, ensuring comprehensive solutions for complex challenges.
Great American Environmental was established in 2008 and is one of the few carriers that has consistently served this specialized market. The division’s reputation is built on specialized underwriting, timely claims handling, and exceptional service, making it the provider of choice for brokers and insureds nationwide.
Beyond risk transfer, Great American Environmental is committed to helping clients achieve operational resilience and long-term success. By combining deep industry expertise with innovative coverage solutions, the team works strategically to protect businesses against uncertainty and support growth in an evolving risk landscape.
Disclaimer
For agent/broker use only. The insurance products described may not be available in all states. Coverage is summarized. Refer to the actual policy for a full description of applicable terms, conditions, limits and exclusions. Policies are underwritten by Great American Insurance Company, an authorized insurer in all 50 states and DC, and Great American E&S Insurance Company, an OH domiciled surplus lines insurer, eligible to underwrite surplus lines insurance in all 50 states and DC, 301 E. Fourth St., Cincinnati, OH 45202. This is not intended as a solicitation or offer to sell an insurance product in a jurisdiction in which the solicitation, offer, sale or purchase thereof would be unlawful.
This article was created in partnership with Great American Insurance.
