ERP - Environmental Risk Professionals

Beverage Wastewater

Alcoholic beverage production, cleaning facilities, tanks, barrels, transfer lines, and equipment generate large quantities of wastewater. The wastewater can have a low pH and dark color and contain high levels of organic and inorganic matter, sugars, sulfates, heavy metals, acids, ash, carbon, and nutrients such as nitrogen, phosphorus, and potassium. Improper collection, containment, treatment, and disposal or releases of wastewater during storage, on-site treatment, or transportation to a disposal site can result in environmental liability. Wastewater that discharges into surface waters, such as rivers, lakes, and streams, can cause algae blooms and harm aquatic life and other natural resources. Wastewater that leaches into soil and groundwater can impact soil alkalinity and groundwater quality. Both state and federal agencies may regulate wastewater discharge and disposal.

Storage Risks and Spill Prevention

Storage tanks, barrels, and drums can be used during production to store raw materials, finished products, additives, and corrosive chemicals for cleaning equipment and tap lines. Fuels may also be stored in tanks for diesel generators or to fuel fleet vehicles. Leaks or spills or a malfunction of equipment, pumps, valves, and pipes can cause a release of contents to leach into the soil or groundwater or enter floor drains or storm drains and contaminate waterways.

Fire Hazards and Toxic Run-off

Stored contents may be flammable or pose explosive hazards, resulting in a fire that spreads and releases contained materials. A hostile fire at the facility could emit toxic fumes and smoke from stored materials or a mix of materials resulting from the fire. Firefighting solutions could create contaminated run-off that spreads to nearby storm drains, surface waters, or properties, resulting in environmental cleanup and tort liability.

Refrigerants

Refrigeration systems and chillers may use chemicals such as ammonia, hydrofluorocarbons (HFCs), or chlorofluorocarbons (CFCs). Improperly operated, inspected, or maintained systems can result in an accidental hazardous release of these chemicals. Refrigerants could also be released during the service, repair, maintenance, or disposal of units. Exposure to workers, visitors, and third parties, may result in injury or death.

Air Emissions

Air pollutants can be released from grain receiving, grain handling, and drying equipment, fuel-burning equipment, or during fermentation. Facilities may be required to obtain an air emissions permit and are subject to environmental regulatory action.

Legionella

Legionella is a bacterium that causes a form of potentially fatal pneumonia. Legionella can thrive in water-containing systems like air conditioning or heating and cooling systems. Adequate warm temperatures and inadequate chlorination may result in legionella growth and airborne dispersal. Exposure of third parties to legionella can result in Legionnaires’ disease, Pontiac fever, or severe complications of existing respiratory diseases.

Mold

Mold growth can result from moisture and wastewater releases into building materials and subsurfaces due to leaks, overflows, and blocked drains or pipes in appliances, equipment, tanks, or plumbing systems. Mold growth within the facility can also occur due to improper humidity controls or moisture intrusion from stormwater. It can lead to cleanup and environmental tort liability.

Stormwater Run-off

Raw materials, by-products, or waste products stored outdoors can be exposed to weather elements and contaminate stormwater run-off. Improper storage or stormwater controls could allow contaminated run-off to impact surrounding soils and nearby properties or discharge into storm drains. Facilities may be required to obtain a stormwater permit and be subject to state regulations.

Loading and Transport

During transportation, loading, and unloading, an accident or container breach could cause a leak or spill of raw material or finished product, resulting in environmental cleanup liability. Transportation exposures may be from the insured operating their vehicles or through contingent liability through those they hire.

Hazardous Waste and Disposal

The facility’s waste can include fluorescent bulbs, batteries, mercury-containing devices (such as thermostats), corrosive cleaners, disinfectants, and wastewater. These wastes can be hazardous or require special disposal. Improperly segregated and disposed of wastes can result in regulatory fines or lead to cleanup and environmental tort liability.

On-site cleanup of new and pre-existing pollution conditions

Off-site cleanup of new and pre-existing pollution conditions

Third-party claims for bodily injury and property damage

Third-party claims for cleanup

Both sudden and gradual pollution conditions

Aboveground and underground storage tanks

Non-owned disposal sites

Business interruption resulting from pollution conditions

First and third-party transportation pollution liability

Mold, bacteria, viruses, legionella, and more

Loading and unloading

Defense of third-party claims

Civil fines and penalties, where allowed by state law

Natural resource damage

Claims Scenarios & Examples

A brewery’s discharge of industrial waste at a municipal treatment facility was found to be violating its pre-treatment permit requirements. The violations threatened to upset the treatment facility, which could have impacted the nearby river that was the drinking water source for 1.5 million people. The brewery was found to be in violation of the Clean Water Act. They were required to pay close to $10 million to settle the charges, which included $7 million to upgrade their breweries, set up an environmental management system, and bring on an outside auditor while improving training. The other $2.8 million were in civil penalties.

A brewery was found to be discharging metals and other contaminants into the town’s sewer system. The town’s wastewater officials notified the brewery owners of the violation and issued them a fine. The effluent flow and values for metal, notably lead, copper, aluminum, and zinc, as well as biochemical oxygen demand, total suspended solids, ammonia, nitrogen, phosphorus, nitrate, and nitrite, were all at levels higher than the brewery’s engineers submitted during the business’s planning phases.

The cooling tower at a distillery was found to be the source of a Legionnaires’ outbreak. One worker from a nearby business died, and dozens of others were sickened from the exposure. The distillery was responsible for failing to devise and implement a biocide control program for the cooling towers. The location had to shut down during the investigation.

A distillery’s whiskey storage warehouse collapsed, releasing 120,000 gallons of spirits into retention ponds. Whiskey migrated into a nearby stream and river, resulting in a fish kill of hundreds of fish. The distillery was cited for not reporting the spill promptly and polluting the different waterways. Officials fined the distillery’s parent company $25,000 a day after the alcohol was discovered in the bodies of water.

While trying to unload tequila from a truck into a storage tank at a distillery, more than 1,500 gallons of tequila spilled due to the storage tank already being full. The tequila flowed into the sewer system, and fire and sewer officials were called to the scene due to the flammability of the liquor. The distillery was liable for emergency response and cleanup costs.

Residents that lived near whiskey distilleries began to notice a black fungus growing on their rooftops, shingles, siding, awnings, cars, and ceiling rafters that wouldn’t go away. Residents even tried sandblasting and power-washing, but it remained. The fungus was believed to be from the distilleries. As whiskey ages, ethanol is naturally released. The residents claimed that the distilleries were allowing too much ethanol to escape, resulting in the “whiskey fungus.” Attorneys claimed this was a property issue and caused a diminution in the area’s value of homes and automobiles. The residents sued the companies, requesting better control of the ethanol released and compensation for the resulting permanent property damage.

A 55,000-gallon tank at a distillery was used to store fermented mash used during bourbon production. One of the legs of the tank gave way and flipped the tank, puncturing three other fermenting tanks nearby as well. Roughly 120,000 gallons of the mash were released into a secondary containment structure; however, about 10,000 gallons escaped into a storm drain, which led to a tributary. The spill caused two people to be injured, and a contractor was necessary to vacuum up spilled liquids and monitor the stream.

A distillery warehouse was struck by lightning, causing a massive fire. Firefighters responded to put out the fire, causing contaminated run-off (a combination of alcohol and firefighting chemicals) to flow into a nearby river, killing thousands of fish. The distillery faced fines for the contamination.

A tank at a brewery experienced a small ammonia leak, resulting in an evacuation. One person experienced difficulty breathing after exposure to the ammonia and went to the hospital. Some ammonia did escape into the atmosphere, but emergency crews were able to quickly mitigate it. The ammonia leak was the second this brewery had experienced that resulted in an evacuation.

After triggering a wrong switch on a fermenting tank at a brewery, 77,500 gallons of alcohol were released into a creek. As a result, thousands of fish were killed, and residents were advised to avoid contact with the creek.

Property Types

Breweries/Distilleries

Environmental Exposures May Include: