Property Types

Cold Storage Facility

Refrigerated warehouses, used by various industries, including food, pharmaceutical and medical, face significant environmental hazards. Chemicals, such as anhydrous ammonia, are commonly used as refrigerants, and leaks can lead to dangerous fire and health hazard risks. Building materials, backup generators, and stored chemicals can generate hostile fire and environmental cleanup liability exposures. Due to the difficulties of controlling moisture in cold storage facilities, mold and mildew can rapidly grow and cause cleanup and third-party liability.

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Environmental Exposures May Include:

Anhydrous Ammonia
Expanded Polystyrene Insulation
Hostile Fire and Chemical Run-off
Moisture and Mold
Backup Generator Emission Hazards
Loading & Unloading
Illicit Abandonment

Anhydrous Ammonia

Ammonia is widely used as a refrigerant in cold storage warehouses and ice plants. Anhydrous ammonia is highly corrosive, and exposure to it may result in chemical-type burns to skin, eyes, and lungs and may also result in frostbite. Accidental ammonia releases can cause injuries and death to employees, emergency response personnel, and people in surrounding communities. Anhydrous ammonia is a flammable gas and, therefore, also presents the potential for explosions at the right concentrations, which is more likely to happen when released in a confined space. It can be ignited by something as common as the electric flash from a switch. Improperly operated, inspected, or maintained systems can result in an accidental release of ammonia. Moving products within a facility can result in impact damage to unprotected piping or system evaporators. Corrosion, erosion, upsets, and vibration are other conditions that can cause an accidental release.

Expanded Polystyrene Insulation

Insulation is added to walls and ceilings of cold storage buildings to maintain proper temperatures. Expanded polystyrene insulated panel (EPS) is a type of insulated panel used extensively in buildings across the food industry. Most modern supermarkets have freezers and cold storage using EPS, while some may also feature EPS in the external cladding and roofing of the building. Polystyrene is highly flammable and will melt. During melting, toxic fumes may emanate and drift off the premises. Further melting creates a toxic stream and may migrate with firefighting water, contaminating surrounding soils and groundwater.

Hostile Fire and Chemical Run-off

Due to the building materials, storage containers, and volume of chemicals present, there is a significant risk of hostile fire, smoke, and run-off. Fighting a fire poses unique challenges, as the insulated walls and ceilings retain heat and smoke, and the freezing temperatures make traditional wet sprinkler systems impractical. Systems designed for cold storage rooms risk forming ice plugs and require more testing, inspection, and maintenance.

Moisture and Mold

Moisture control in cold storage facilities is challenging. These spaces are tightly constructed and sealed to maximize the cooling system’s efficiency. Poor ventilation and limited airflow typical of cold storage rooms further amplify this problem. Condensation can develop when doors are opened to surrounding areas with warmer temperatures, like a loading dock. Moisture can also be introduced by off-gassing from the products and occupants or by wash-down activities and being trapped in the air-tight room. Mold and mildew can grow on cold storage rooms’ walls, floors, and ceilings, including wooden structural components and drywall, resulting in structural damage and possible health hazards to third parties.

Backup Generator Emission Hazards

Cold storage facilities require energy backup systems to ensure the facility can maintain proper temperatures during power loss. Using diesel generators can generate diesel soot or particulates, an airborne carcinogen, and pose health hazards to third parties. Storage tanks for backup generators can leak fuel oil and contaminate a drainage ditch or migrate to an adjacent site, requiring cleanup. Loose components can cause leaks, deteriorated gaskets, incorrectly fitted components, cracks, or holes in fuel lines.

Loading & Unloading

Heavy-duty trucks loading and unloading at the facilities can leak automotive fluids, including fuel and oil, or spill raw materials from the delivery. These fluids can be collected by rainfall, creating contaminated stormwater run-off that can pollute storm drains and adjacent sites.

Illicit Abandonment

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

Environmental Pollution Liability Can Provide Coverage For

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

Mold, bacteria, viruses, legionella, and more

Business interruption resulting from pollution conditions

First and third-party transportation pollution liability

Loading and unloading

Defense of third-party claims

Illicit abandonment

Natural resource damage

Claims Scenarios & Examples

A cold storage facility experienced a release of more than 32,000 pounds of anhydrous ammonia. A sudden, localized pressure surge (a “hydraulic shock”) went through the refrigerator system and caused the piping, valves, and other components to fail. Thirty-two off-site workers were hospitalized as a result.
A cold storage and food warehouse was found discharging pollutants in a creek, violating the Clean Water Act and their industrial stormwater general permit. Some of the warehouse’s violations included failure to properly implement corrective action upon exceeding benchmarks, incorrectly documenting the monthly inspections, and not having a proper stormwater pollution prevention plan. The company agreed to implement plans to help reduce pollution leaving the facility and pay a fine of $41,500.
A cold storage warehouse performed maintenance on their refrigeration system daily, and a gas release occurred one day. The neighboring area had to be completely evacuated, including businesses. People at the neighboring businesses complained of headaches and nausea, and the other companies sued the warehouse for business interruption and bodily injury.
During an inspection of a cold storage facility, the inspector witnessed an accidental release of anhydrous ammonia and promptly evacuated the area. Three other company locations were also inspected and found to have dangerous conditions with their ammonia refrigeration systems. The company was fined $108,000 and had to spend another $345,000 on environmental projects.
Different cleaners, degreasers, and paints were used at a refrigerated warehouse and washed down the facility’s floor drains, which flowed into the on-site septic system. The septic system leaked after contaminated on-site and off-site soil and groundwater were discovered. Nearby property owners filed a class action lawsuit for decreased property value because of the contamination. Remediation and claims settlement exceeded $500,000.
A cold storage facility experienced an ammonia leak that was believed to be caused by a valve not being closed completely. There were reports of ammonia in the air, prompting first responders and hazmat crews to come to the scene. Police officers were also called in to close down roads near the facility.

Final Consideration

Your business can be faced with the cost to defend itself against allegations or legal action from pollution related events, regardless if you are at fault or not. Having the proper insurance coverage in place will help fund the expenses incurred to investigate or defend against a claim or suit and provide you with environmental claims handling expertise.

This environmental risk overview offers a general understanding of potential risks and may not reflect all risks associated with your business. Environmental Risk Professionals has compiled this overview for informational purposes only. This overview does not constitute legal opinion or advice, nor does it establish a consultant-client relationship. This overview is not intended to guide project parties in interpreting specific contracts or resolving disputes; such decisions may require consultation with counsel and depend on various factors. © 2025 Environmental Risk Professionals, LLC

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