The Importance of Products Liability for Groundwater Operations

Groundwater is an important resource. State and federal laws regulate its use and establish rules for safety and management. Groundwater operations are responsible for protecting water quality from contamination. Any industry associated with operations, including those that provide products and services, is potentially liable when contamination leads to property damage, injury, or illness. Groundwater insurance coverage offers essential protection in the event a contamination claim is filed.

Groundwater Contamination Sources

Groundwater contamination originates from numerous sources. Almost every incident is the direct result of human activity. Spills at the surface can infiltrate aquifers because surface and groundwater systems are connected. Leaks that occur below the surface but above the water table also pose a threat. Industry, commercial, municipal, agricultural and residential activities all have the potential to negatively impact groundwater systems. Companies that manage, drill, study, clean, or develop groundwater systems need to be aware of the potential for contamination from multiple sources.

Groundwater Contamination Concerns

Companies that perform groundwater operations are required to have safeguards in place to prevent contamination. When these measures fail, groundwater insurance claims result. Unfortunately, even a minor issue often leads to significant problems. Water in an aquifer moves slowly, causing pollutants to accumulate quickly. Pollutants also remain concentrated since the lack of movement prevents dispersion and dilution.

Contamination poses a significant environmental and human health threat. To make matters worse, these incidents are difficult and expensive to clean up. Toxins such as lead, arsenic, radon, mold, and bacteria are often byproducts of leaks that aren’t covered under standard liability insurance. These contaminants pose an increased risk that can lead to financial devastation when companies don’t have the right kind of insurance.

Groundwater Contamination Legalities

Contamination often results in liability claims. These can be filed against individuals and businesses that conduct groundwater operations, including:

  • Drilling companies
  • Drilling equipment suppliers
  • Well owners and operators
  • Scientists, consultants, and laboratories
  • Geothermal companies
  • Groundwater remediation companies

The federal or state government and private parties can file a lawsuit. Government agencies may also take administrative action for failure to adhere to state or federal regulatory requirements.

Lawsuits can be civil or criminal in nature. If a party is held liable for contamination, it incurs the costs of litigation and remediation, as well as fines and monetary damages. If people are injured, get sick, or die due to the contamination, the business faces additional costs. The courts may also order an injunction, preventing a company from conducting at least part of its operations.

Groundwater Insurance Coverage

When your clients conduct operations that have the potential to result in groundwater contamination, they need to understand the risks involved and why it is important to procure products liability insurance. They need coverage that is tailored to their specific operations. A good policy ensures protection for a wide range of contaminants, including radon, lead, mold, arsenic, and bacteria, which are typically not covered by standard liability insurance.

About Watercolor Management

Watercolor Management has insured the water industry for over 30 years. Our policies include unlimited defense cost coverage in the event of a lawsuit against you. Call us at (855) 929-0824 or email for a quick quote for your Water Business Professional, Products/Completed operations, Pollution and General Liability Insurance.