Property Types

Bulk Storage Facilities

Bulk storage facilities store large volumes of chemicals or petroleum products in aboveground storage tanks, such as gasoline, diesel fuel, and oil. They may also have underground storage tanks or underground oil water separators. These facilities can face significant environmental exposures. Improper maintenance, inspection, and use of storage tanks, piping, and associated equipment can result in a hazardous release of stored contents. Releases or spills could result from the leaks or failure of a tank or piping system, inadequate or failure of secondary containment systems, or loading/unloading of tanks. Spills and releases can contaminate soil, groundwater, or surface waters; contaminate local wells or city drinking water supplies; or migrate to neighboring properties, resulting in expensive cleanup, remediation, and third-party bodily injury costs. Natural resource damage claims can also result from impacts to surface waters, groundwater, or wetlands.

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Secondary Containment Overflows

Catastrophic failure of an aboveground storage tank (AST) caused by an accident or rupture of the tank could cause its contents to enter and breach the secondary containment or exceed the capacity of the secondary containment structure.

Conveyance System Failures

Product piping for storage tanks may be aboveground or underground. Releases of products could occur from damage to the piping system, including leaks from joints, elbows, and check valves.

Subsurface Migration from Tank Bottoms

The tank bottoms for large storage tanks can develop leaks from corrosion or other causes and cause hazardous materials or petroleum products to escape into the secondary containment structure or migrate to underlying soils or groundwater

Cleaning Residuals and Disposal

Cleaning storage tanks may generate wastewater or sludge that could be classified as hazardous waste. These waste materials must be taken to a non-owned disposal facility or wastewater treatment facility. Spills could occur during cleaning, transport, or from waste storage areas, creating environmental risks. Improper waste disposal could lead to environmental liability or legal consequences for violating regulatory requirements.

Air Emissions

Air emissions would be generated from tanks and during loading/unloading at those facilities handling volatile fuels or chemicals. Vapor control devices may not be present or may malfunction, resulting in air emissions that could exceed permit limits, resulting in civil fines and liability claims from nearby third parties.

Leakage from Damaged Containment

The secondary containment for aboveground storage tanks may become damaged or cracked, releasing liquids that may have built up over time due to minor leaks and spills associated with tanks.

Stormwater Run-off

Stormwater captured in secondary containment structures can become impacted by chemicals or petroleum products in storage tanks from leaks or spills. If not properly monitored or contained, impacted stormwater could escape the secondary containment and impact soil, groundwater, or surface water.

Tank Maintenance and Monitoring

Underground storage tanks and oil water separators can be subject to leaks or spills if they become damaged or cracked, are not adequately monitored, or are improperly maintained.

Third-Party Liability and Migration

Storage tanks may migrate to surface waters, including oceans, lakes, streams, etc.; impact soils and groundwater; or potentially contaminate drinking water sources such as municipal and privately owned wells. A release may also damage the local municipal sewer system if it enters drains connected to the municipal storm or sewer system. A release could also migrate to adjacent or nearby properties, resulting in third-party claims for property damage or bodily injury. Releases may damage natural resources such as fish, wildlife, and biota and could result in natural resource damage claims.

Fuel and Chemical Handling Spills

Releases or spills from storage tanks may occur during the loading or unloading of their contents, including hazardous materials or petroleum products.

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

Defense of third-party claims

Both sudden and gradual pollution conditions

Aboveground and underground storage tanks

Business interruption resulting from pollution conditions

First and third-party transportation pollution liability

Loading and unloading

Emergency response costs

Civil ﬁnes & Penalties

Crisis/reputation management

Natural resource damage claims

Non-owned disposal sites

Claims Scenarios & Examples

An aboveground storage tank that contained oil experienced some corrosion, which caused a slow leak. The leak contaminated soil and groundwater, and remediation costs reached $270,000.

A bulk storage facility experienced a leak at a joint of a below-grade piping system that went unnoticed for a while. A significant amount of fuel was released from the piping system into soil and groundwater and migrated into a nearby stream. Remediation costs surpassed $600,000.

Seven hundred barrels of oil spilled into stormwater ditches at a bulk storage facility. The stormwater ditches were located along both sides of a roadway next to the property and discharged into a nearby river. About 100 barrels worth of oil seeped into the river. The facility faced remediation costs, including excavation of contaminated soil, recovery of floating products, and river dredging. The facility’s environmental liability policy paid $2.3 million in remediation expenses related to the spill.

Vandals broke into a bulk storage facility while it was closed for the weekend. The vandals damaged a valve on one of the storage tanks, which leaked fuel until employees noticed the leak when the facility opened on Monday morning. The leak had stayed in the containment area; however, subsurface testing was required by local environmental officials to make sure there were no negative impacts on the soil and groundwater. Investigation and cleanup of the release cost $90,000.

The concrete secondary containment for an aboveground diesel tank at a bulk storage facility had a crack. The high-level alarm on the tank experienced a malfunction, causing the diesel tank to be overfilled. The fuel seeped into the secondary containment, which exited through the crack and migrated onto a neighboring property. Both the facility and third-party property were contaminated.

During a large storm that brought four inches of rain, the secondary containment system for tanks at a fuel terminal overflowed. As a result, 200 gallons of fuel oil spilled into an adjacent river. The oil migrated to a marina with 73 yachts docked. The fuel terminal had to have the yachts cleaned and was responsible for negative impacts on the harbor.

An oil water separator at a bulk storage facility had an unspecified fracture in an underground pipe. Oil slowly leaked from the system and into the soil and groundwater, contaminating the site and adjacent property. The leak was noticed when an oil sheen was spotted on the nearby stream. After an investigation was done, a soil and groundwater treatment program was put into place. To quickly mitigate environmental impacts on the stream, the remediation had to be done immediately, resulting in even higher cleanup costs.

A liquid chemical terminal had a two-million-gallon storage tank containing liquid urea ammonium nitrate fertilizer. One day the tank collapsed and overtopped a containment dike. The contents flooded areas of the next-door residential neighborhood and migrated into the adjacent river, which caused the evacuation of 43 residences. The investigation found that welding on the tank had not been done to industry standards and that the terminal had yet to do post-welding inspections before refilling the tank. The terminal faced cleanup costs along with bodily injury and property damage claims.

A petrochemical terminal experienced a fire, which resulted in a dike breaking and substantial amounts of toxic chemicals released into neighboring waterways, including xylene and benzene. Emergency response costs incurred by the county alone totaled $1.9 million. The terminal also faced long-term remediation costs and natural resource damage claims.