• Mike Mahfouz, Landing Insurance Agency

Storage Tank Pollution Liability By Landing Insurance - Claims Examples

Tank Policy Overview

Storage tank policies are designed to cover corrective action costs (aka cleanup costs) and third party damages that arise as a result of pollution conditions emanating from scheduled underground storage tanks (UST’s) and aboveground storage tanks (AST’s). These policies can also be used by commercial businesses to fulfill federal and state financial responsibility requirements for storage tanks. Most states require a certificate of financial responsibility for UST’s, and a tank policy satisfies this requirement.

Claims Examples

A service station owner, who performed regular tank testing on his fuel systems, discovered during the latest test that an underground tank supply line was leaking. Soil sampling and investigations identified that diesel fuel had pooled around the tank. The tank was excavated and the contaminated soils were removed and disposed at an offsite waste facility. A total of $368,000 was spent between the costs for investigation, remediation and disposal.

Gas station owner reported a claim when gasoline was discovered to be coming up through the concrete pad associated with the fuel dispensers. The release was confirmed by the gas station owner and excavation and remediation began. It was determined that the underground storage tank system was leaking from several areas (piping, sumps, and the tank itself) and the contamination was more extensive than originally thought. Cost of cleanup exceeded the insured’s $1,000,000 policy. An additional $100,000 was spent on legal fees associated with regulatory compliance issues.

During a routine daily inspection, a diesel spill was detected coming from a scheduled aboveground storage tank. The release, caused by the overfilling of the tank, flowed onto an adjacent property, resulting in contamination both on-site and off-site. TheThe Contamination was remediated with no additional impacts discovered.

An oily sheen was observed on a local stream. It was traced back to a leak from an underground storage tank at an insured gas station. It was determined that the contamination had impacted the stream for several miles damaging the aquatic species. The station owner was responsible for the remediation and natural resources damages from the impacts to the stream.

Poor secondary containment; The concrete secondary containment of a 10,000-gallon diesel aboveground storage tank was cracked. A release from the tank spilled 8,000 gallons into the containment. The diesel seeped into the underlying soils and required costly excavation and removal. The total cost for investigation, removal and disposal exceeded $320,000.

During construction of a new convenience store an unknown leaking underground storage tank was discovered. Cost to remediate the site was $125,000.

A diesel fuel tank system’s piping released a substantial amount of fuel into soil and groundwater that eventually migrated to a nearby stream. Subsequent soil and groundwater remediation costs of $600,000 were incurred to satisfy environmental regulators and settle the claim.

Corrosion in an aboveground storage tank caused a leak resulting in soil and groundwater contamination. Cost to remediate was $270,000.

A gas hauler delivers fuel to a service station but unloads into a monitoring well rather than into a tank. The monitoring well is on site to access the ongoing groundwater clean-up from prior contamination and is not to receive several thousand gallons of petroleum (clean-up corrective action from loading and unloading).

A UST leaks petroleum into a neighbor’s drinking water well. The well must be shut down and drinking water must be provided to neighboring properties and pipeline installed to municipal water supply, all at the tank owner’s expense.

An oily sheen was observed on a local stream. It was traced back to a slow leak from an underground tank at a service station. It was determined that the contamination had impacted the stream for over five miles. The station owner is responsible for clean-up and Natural Resources Damages. The estimated total costs are in the hundreds of thousands of dollars.