Chemical Manufacturers

Accidental releases during the transportation of products or wastes from a manufacturing facility due to improper cargo securement, a loose valve, or vehicle upsets or overturns can result in environmental liability.

Air emissions can emanate from the chemicals stored or the manufacturing process or from releasing exhaust or toxic gases from equipment. Chemicals may be stored that produce a vapor cloud if accidentally released. Vehicles and powered equipment, such as forklifts, trucks, and cranes, may be used at facilities. These types of internal combustion vehicles are powered by diesel or propane, which can emit carbon monoxide gas and diesel particulates. Improper controls or malfunctioning equipment can result in exceedances and regulatory violations. Air emissions or a vapor cloud release can pose health hazards to third parties.

Chemical manufacturers can have environmental exposures from products they manufacture or distribute if pollution conditions result from the products’ use, defect or deterioration, or the failure of the product packaging. Product pollution claims include environmental damage, third-party bodily injury, and property damage. Many General Liability and Product Liability insurance policies deny coverage for cleanup, bodily injury, and property damage and defense arising from using or discharging pollutants from a chemical product.

Incompatible chemicals are prone to react violently or produce toxic byproducts/gases when stored together or mixed. Flammable products may result in a fire that spreads and releases other contained materials, emitting toxic fumes and smoke from the materials stored at the site or due to a mix of materials that occurs due to the fire. Firefighting water or foam could create contaminated run-off that spreads to nearby storm drains or properties, resulting in environmental cleanup and tort liability.

Cleaning storage tanks and processing equipment may generate wastewater or sludge. Wastewater treatment systems may be present at facilities, or these waste materials may be taken to a non-owned disposal facility or wastewater treatment facility. Releases of insufficiently treated wastewater could occur, or spills could occur during cleaning, transport, or transfer from wastewater storage areas and create environmental risks. Improper waste disposal could lead to environmental liability or legal consequences for violating regulatory requirements.

Chemical manufacturers may generate hazardous or regulated wastes requiring special disposal procedures. Improper waste disposal could lead to environmental liability or legal consequences for violating regulatory requirements. A chemical manufacturer can become a Potentially Responsible Party (PRP), liable for clean-up costs in the environmental cleanup of a non-owned disposal (NOD) facility where they sent wastes.

Many chemical manufacturing facilities are located in industrial areas, and contaminants from neighboring facilities could migrate to the manufacturer’s property. If the neighboring business owner is not properly insured or goes bankrupt, the cost of cleanup could fall on the manufacturer for their property. Additionally, impacts from historic operations could be present, potentially leaving the current operator liable for cleanup under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).

Inadequate security at a facility may lead to vandalism. Damage to facility equipment, such as aboveground tanks or containers of chemicals, can result in environmental releases.

Illicit abandonment is the illegal dumping of pollutants on a property by a third party. It can become the property owner’s burden for cleanup and third-party bodily injury or property damage if law enforcement cannot find the originator of the waste.

Stormwater run-off could come in contact with chemicals, debris, fueling areas, wastes, and other outside storage at chemical manufacturing facilities. If stormwater is not properly controlled, contained, or pre-treated before discharge into sanitary or storm drainage systems, it can pollute soil and groundwater or discharge directly into surface waters, impacting human health and aquatic systems.