Which statement best describes coverage for environmental liabilities?

• A. Environmental liability is automatically covered under CGL
• B. Separate environmental liability coverage is typically needed
• C. Environmental liability cannot be insured
• D. Only property damage from pollution is covered

Answer: (B)

Environmental liability exposures are typically not fully covered by a standard Commercial General Liability policy because pollution risks are excluded or heavily limited in those forms. A CGL may respond to a sudden and accidental release in some narrow situations, but the long‑tail, gradual, or on‑site pollution exposures and the associated cleanup costs are generally not covered. Because of that gap, a separate environmental liability policy—such as pollution liability or environmental impairment liability—is commonly purchased to cover third‑party bodily injury and property damage caused by pollution, as well as cleanup costs and defense expenses. This is why the best answer is that separate environmental liability coverage is typically needed. The other statements aren’t accurate: pollution isn’t automatically insured under the CGL, environmental liability can be insured with specialized policies, and coverage goes beyond just property damage to include bodily injury and cleanup costs.