Property Types

Gas Stations

Gasoline service stations face numerous environmental exposures ranging from petroleum products and automotive fluids stored on site, wastes generated from automotive repair, wastewater from car wash operations and facility cleaning, and leaks from fueling and repair operations. Releases of pollutants from gas stations can contaminate soil, groundwater, or surface waters, resulting in claims for on-site or off-site bodily injury, property damage, cleanup, or natural resource damage. Gasoline stations accumulate sludges from oil water separators, generating other wastes, including waste oils and automotive fluids, oil filters, solvents, parts washing fluids, etc. Handling and disposal of these wastes can lead to tort liability for the station.

Download PDF

Environmental Exposures May Include:

Storage Tanks
Fuel & Fluid Run-off
Hydraulic Lifts
Oil Water Separators
Wastewater
Chemical Storage
Waste Management
Accidental Releases During Transport
Asbestos
Flammables
Vapor Emissions

Storage Tanks

Aboveground and underground storage tanks may store petroleum products and automotive fluids, including gasoline, diesel, new and used oil, and antifreeze. Improper management and monitoring of aboveground and underground storage tanks and associated equipment can lead to spills and releases. Spills can also occur during the loading or unloading of materials. Underground storage tanks, dispensers, sumps, piping, and other components may leak over time or fail. Aboveground storage tanks have the potential to experience leaks from tank bottoms or ruptures. Damage, cracks, or overflow of secondary containment or inadequate secondary containment can allow leaked contents to leach into the underlying soils and groundwater. Released contaminants may contaminate soil or groundwater, enter drywells or storm drains, migrate to neighboring properties, or degrade natural resources.

Fuel & Fluid Run-off

Fluids, such as motor oil, hydraulic fluid, gasoline, or diesel fuel, can leak from vehicles being filled up or serviced at the station or accidental spills and leaks from nozzles during fueling. These can lead to soil and groundwater contamination, or pollutants can collect in stormwater run-off and enter drywells or storm drains, leading to surface water. Releases to surface water may cause damage to natural resources such as fish, wildlife, and biota, and it may also harm local drinking water sources.

Hydraulic Lifts

Hydraulic lifts may be at gasoline service stations with repair facilities to raise vehicles for servicing and other automotive work. Hydraulic lifts can either be below or aboveground, and releases from underground hydraulic oil reservoirs can easily go undiscovered, allowing hydraulic fluid to leak into the subsurface over a long period, causing soil or groundwater contamination. Releases from aboveground lifts can also migrate to soil or groundwater or enter storm drains, sewer systems, or drywells, resulting in contamination.

Oil Water Separators

Oil water separators may be at gasoline service stations with repair facilities and can be in-ground or aboveground. These structures receive oily wastewater and may develop leaks allowing oil to seep into the surrounding soil and groundwater. Releases can result in on-site contamination, or contamination can migrate to neighboring properties.

Wastewater

Wastewater from car washes may have high levels of oil, grease, suspended solids, and heavy metals, as well as cleaning chemicals, degreasing solvents, and detergents. Run-off from washing areas creates the potential for pollutants to enter sewer drains or storm drains, where they can contaminate water sources and cause natural resource damage.

Chemical Storage

Petroleum-based cleaning products, degreasers, new and used oil, antifreeze, and solvents, must be properly stored on the site. Gasoline service stations also may store new and used batteries on their properties. Improper storage of these chemicals or batteries can result in the release of contaminants.

Waste Management

Gas stations generate wastes such as used oil, auto fluids, lead-acid batteries, wastewater, used tires, sludge, and oil from oil/water separators, shop rags, hazardous waste, and solid wastes. The generator must determine if its wastes are hazardous and require special disposal or recycling procedures. Wastes must be properly characterized, transported, and disposed of at facilities that accept the material. Waste generators retain “cradle to grave” liability for waste disposal and could become liable for pollution conditions at non-owned disposal sites (NODS).

Accidental Releases During Transport

Transporting waste materials from the gas station by the owner or third-party carriers to disposal sites or recycling centers can lead to environmental liability while on the road and during loading and unloading operations. Spills or leaks resulting from accidents or improper cargo securement can lead to third-party and cleanup liability.

Asbestos

Asbestos can be found in automotive brake pads and clutch systems. When asbestos fibers are disturbed and released, they can be inhaled and cause serious health hazards or fatal diseases such as asbestosis, lung cancer, and mesothelioma.

Flammables

Some products at gasoline service stations are flammable and may result in a fire that spreads throughout the facility, releasing potentially hazardous toxins into the air. A fire could also emit toxic fumes and smoke from the burning materials at the property or due to a mix of materials due to the fire. Firefighting solutions such as water and foam could create contaminated run-off that spreads to nearby storm drains or other properties, resulting in environmental cleanup and tort liability.

Vapor Emissions

Vapor recovery systems at gasoline service stations are designed to capture up to 95% of the vapors and recycle them into fuel storage tanks. However, some vapors are emitted into the atmosphere from fuel dispensing and other sources. The release of vapors into the atmosphere from petroleum products, cleaning products, and idling cars at gas stations can contribute to air pollution.

Environmental 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 cleanup costs

Third-party claims for bodily injury and property damage

Both sudden and gradual pollution conditions

Defense of third-party claims

First-party and third-party transportation pollution liability

Non-owned disposal sites (NODS)

Business Interruption expenses resulting in pollution conditions

Loading and unloading

Aboveground and underground storage tanks

Mold, bacteria, legionella, and more

Natural resource damage

Emergency response expenses

Civil fines and punitive damages, where allowed by state law

Illicit abandonment

Claims Scenarios & Examples

An oily sheen was observed on a local stream. It was traced back to a slow leak from an underground storage tank at a nearby 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 stream’s cleanup and natural resource damage.
The insured was the owner and operator of a gas station with different types of fuel products. They noticed that the inventory records showed a small oil decrease over time and scheduled a pressure test to see what was happening. They determined that one of the tank’s supply lines was leaking at the connection point. Excavation was done around the area, and fuel was discovered below the joint in the line. Control wells were drilled to help stop the spread of contamination, and the polluted soil was excavated and disposed of properly. The insured’s pollution policy paid for the investigation and cleanup, totaling $335,000.
A 10,000-gallon diesel aboveground storage tank suffered a release. Eight thousand gallons spilled into the secondary containment, but the containment was cracked, and the diesel fuel migrated from the containment area and into the underlying soil. The contaminated soil investigation, cleanup, and disposal costs surpassed $320,000.
An in-ground hydraulic lift was removed from a former gasoline service station. During the removal, soil staining was noticed, and an investigation found that the hydraulic fluid from the lift had seeped into the ground over time. The release then migrated from the service station property to an adjacent property. The site and the adjacent property had to be remediated. The costs for the excavation, transportation, and disposal of contaminated soil were extensive.
After filling their vehicle with fuel, a gas station customer accidentally drove away with the fuel pump nozzle still connected to their car. As a result, fuel was released onto the ground. The fuel migrated to the next-door property. The gas station owner faced cleanup costs for their location and the adjacent property.
A service station owner was performing routine tank testing on his fuel system when he discovered a leak from an underground tank supply line. Further sampling was done, and it was found that the leak had contaminated the underlying soil. The contaminated soil had to be excavated and properly disposed of. The investigation, remediation, and disposal costs totaled $368,000.
A gas station owner noticed gasoline was bubbling up under a concrete pad between fuel dispensers. The owner reported a claim and an investigation found that an underground storage tank system had leaks in several areas. The contamination was widespread, and excavation and remediation of the area had to be conducted. Cleanup costs exceeded their $1 million pollution policy limit, and the station owner faced an additional $100,000 in legal fees connected to regulatory compliance issues.
Two couples sued a gas station for polluting their water wells and allegedly impacting their health and property values. The couples claimed that hazardous chemicals, including benzene and methyl tertiary butyl ether (MTBE), were present at the gas station site and migrated in groundwater into their wells. Additionally, the chemicals migrated in vapor to impact indoor air in their homes. The State Department of the Environment identified the gas station as the source of the pollution. The station installed carbon-filtration systems to reduce chemical levels in the groundwater.

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 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

Download PDF