Property Types

Retail Shopping Centers

Retail shopping centers can face many environmental exposures. Various pollutants can enter building materials, be used and stored on-site by the property owner, manager, or tenants, or be abandoned on-site, resulting in environmental cleanup and third-party liability. Hazardous materials can leak from on-site storage tanks, diesel generator systems, and delivery trucks, leaching into soil and groundwater or collecting in stormwater run-off. Collected wastes may contain materials classified as hazardous and require special disposal procedures. Since pollution laws are strict and joint and several, the property owner can be named as a responsible party even if there may not have been negligence on their part. The mere ownership of property creates liability.

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Environmental Exposures May Include

Mold
Legionella
Asbestos
"Sick Building Syndrome"
Automotive Fluid Leaks
Paints and Solvents
Perchloroethylene
Pesticides
Grease Traps
Refrigerants
Storage Tanks
Diesel Generators
Illicit Abandonment
Waste Management

Mold

Mold growth can result from water and wastewater releases into building materials due to leaks, overflows, and blocked drains or pipes. Mold may also develop in other water systems, such as refrigeration or HVAC systems and water features.

Legionella

Legionella is a bacterium that causes a form of potentially fatal pneumonia. Legionella can thrive in water-containing systems like air conditioning, heating and cooling systems, and water features. It can accumulate in warm, stagnant, pooled, or infrequently drained water. Poorly maintained systems and inadequate corrosion control or sanitization can result in Legionella exposure.

Asbestos

Older buildings may contain asbestos, lead, and polychlorinated biphenyls (PCBs). Asbestos-containing material (ACM) can be found in ceiling and floor tiles, insulation, around wiring, and fireproofing on structural steel. PCBs can be found in areas such as window caulk and light ballasts. Lead could be present in paint or pipes. Claims may result from accidental disturbance or alleged exposure during renovation, construction, or interior remodeling.

"Sick Building Syndrome"

“Sick Building Syndrome”, where inhabitants suffer health problems while in a building, is often attributed to poor building design, maintenance, or a faulty ventilation system. Along with asbestos, lead, mold, and bacteria, other contributing exposures include chemicals stored on-site or found in building materials and combustion products such as carbon monoxide, pesticides, or volatile organic compounds, which can emit from various sources, including routine cleaning and building maintenance.

Automotive Fluid Leaks

Leaks from delivery trucks of fuels, oils, and other automotive fluids on the property can leach into the ground or discharge into water systems by run-off or collection in stormwater. Run-off from paved surfaces, such as parking lots, can collect fuel, oil, and chemicals and discharge them into water systems.

Paints and Solvents

Tenants may use and stock materials that contain chemicals, such as paints, solvents, lawn care, and automotive products. Leaks or spills from improper handling or storage could result in environmental liability. Chemicals could also be abandoned by a tenant when they vacate.

Perchloroethylene

Shopping centers can have current or past dry-cleaning tenants who utilize chemicals such as perchloroethylene or “Perc ‘’ in their operations. Spills or leaks from equipment can migrate into soil and groundwater. Vapors from released chemicals can also intrude into buildings. Improper handling or disposal by the tenant, including the discharge of cleaning solvents and waste into a drain, can expose the property owner to environmental liability.

Pesticides

Leaks, spills, or over-application of pesticides, insecticides, and rodenticides can contaminate soil, surface water, or groundwater, impacting adjacent properties and stormwater run-off. Inadequate ventilation or insufficient time before building re-occupation can affect third parties with respiratory issues or systemic toxicity.

Grease Traps

Restaurants and fast food establishments may have grease traps onsite. Leaks or spills from poor maintenance or during loading/unloading of grease wastes can contaminate soil or groundwater, clog drains or sewer lines, cause natural resource damage, and expose bacteria and infectious diseases to third parties.

Refrigerants

Restaurant and grocery store tenants use refrigeration systems, chillers, and walk-in coolers. These units may use chemicals, such as ammonia, hydrofluorocarbons (HFCs), or chlorofluorocarbons (CFCs), and their release can cause serious health hazards to third parties, including respiratory illness and even death.

Storage Tanks

Above and underground storage tanks often store potential pollutants such as fuels, heating oil, and lubricants. Tenants may also install tanks for storage, including gas stations, auto repair shops, and dry cleaners. Leaks or spills can contaminate soil and groundwater and pollute stormwater run-off.

Diesel Generators

Centers may require the use of energy backup systems. Using diesel generators can create diesel soot or particulates, an airborne carcinogen, and require storage tanks for fuel that can leak. Loose components, deteriorated gaskets, or cracks or holes in fuel lines can cause leaks.

Illicit Abandonment

Illicit abandonment is the illegal dumping of pollutants on a property. 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.

Waste Management

Collected waste must be properly characterized and segregated based on its type and associated hazards. Wastes collected can contain hazardous materials or materials that require special disposal procedures, and improperly segregated and disposed of wastes can result in regulatory fines or lead to cleanup and environmental tort liability. Materials include fluorescent light fixture ballasts, fluorescent light tubes and bulbs, paints, paint and floor strippers, solvent-soaked rags, used oil, and construction debris containing asbestos, lead, or PCBs.

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

After almost 100 people became sick with Legionnaires’ disease and eight more died, testing was done to find the source. Cooling towers at five buildings, including a shopping mall plaza, received positive test results. The cooling towers had to undergo decontamination, and the facilities had to provide long-term plans for maintaining them to avoid future Legionella growth.
A dry cleaner leased space from a building owner but eventually went out of business and stopped all operations. Soil and groundwater sampling revealed that Tetrachloroethylene, a solvent used in drycleaning operations, was detected on-site and had migrated with groundwater to the adjacent shopping center. Because the dry cleaner was no longer in operation and the property owner did not have a pollution insurance policy, the property owner paid for soil and groundwater remediation, costing $460,000.
A chemical spill occurred at a shopping center when a truck had stopped at the center to make a delivery to their human resources office while en route to deliver the hydrofluoric acid it was transporting. While at the shopping center, the acid, a heavy cleaning chemical, began to spill from the truck. Hazmat crews responded to the spill. Four people at the shopping center came in contact with the chemical and had to go to the hospital.
A shopping center with several restaurants experienced ongoing sewage problems. Sewage would seep throughout the area and into an adjacent apartment complex property, resulting in several tenants moving out due to sewage issues and odors. The state health department became involved and sent an inspector, who cited several businesses for sewage releases. It was believed that grease traps were the issue and were continually backing up the sewer line, although many tenants claimed to clean their grease traps regularly. The shopping center’s owner privately owned the sewer, which the city council blamed for the ongoing sewage problems.
A dry cleaner at a shopping center failed to properly store their used perchloroethylene (PCE) solvent canisters. Left outside near the trash area, the canisters eventually leaked, and the PCE soaked through the asphalt and into the groundwater. The contaminated plume spread to several nearby homes, triggering an expensive environmental cleanup. As a result, local residents filed property damage and bodily injury lawsuits against both the dry cleaner and the shopping center management.
After students and instructors at a karate studio in a retail mall center began having breathing problems, inspections were done to find the source. The building was built in the 1970s, and an investigation found mold, mildew, and holes in the ceiling. The mall’s owner was held responsible for improperly maintaining the rooftop parking deck, leading to water seeping into the studio. The studio also lost students because of mold and eventually sued the landlord.
A shopping center had an unknown party abandon methamphetamine lab waste in the parking lot at night. When employees arrived at the property the next morning, they noticed the waste and immediately called the fire department. Hazmat crews came to the property and found the waste was hazardous. The shopping center paid to properly dispose of the waste.
A shopping center’s floor drains were discovered to be disconnected from the sanitary sewer lines after building renovations. Remediation costs and loss of rental income exceeded $750,000.
An underground storage tank was found to be leaking at a gas station located on a retail shopping center’s out-parcel. The fuel migrated off-site, resulting in soil and groundwater remediation and third-party property damage claims. Although the gas station had tank pollution insurance, the shopping center owner was sued for property damage and incurred defense expenses.

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

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