Contractors

Service Station Construction

CPL/PL

From new construction, including fuel stations, convenience stores, car washes, and maintenance facilities, to renovation of existing buildings or replacement of underground storage tank systems, contractors involved in service station construction face many environmental and professional liability exposures. Dust generation during construction activities can impact air quality and lead to third-party claims for bodily injury. Silt and sedimentation can carry pollutants off-site to surface water bodies or third-party properties during storm events. Asbestos and lead-based paint in older buildings require careful handling and proper disposal. Underground utilities, waste generation, waste disposal, moisture intrusion into buildings, and fuel releases during construction due to improper design or installation are other potential exposures contractors face.

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Environmental & Professional Exposures May Include

Subsurface Work & Underground Utility Strikes
Erosion Control & Sediment Run-off
Moisture Intrusion & Completed Operations Mold
Jobsite Chemical Handling & Completed Operations Pollution
Service Station Design & Testing Professional Liability
Waste Transport & Mobile Transit Liability
Subcontractor Management & Joint Liability
Hazardous Material Abatement & Renovation Disturbance
Preconstruction Planning & Value Engineering E&O
Excavation Dust & Airborne Particulates
Construction Waste Disposal & Manifest Liability

Subsurface Work & Underground Utility Strikes

Subsurface work can impact underground utilities, including gas lines, sewage pipes, existing storage tanks, or unknown hazards such as abandoned storage and septic tanks. Accidental puncture and release of fuel oil, chemicals, toxic gases, or sewage can contaminate soil and groundwater and release hazardous air emissions, resulting in cleanup costs and third-party bodily injury and property damage claims.

Erosion Control & Sediment Run-off

Improper erosion controls for work involving the disturbance, relocation, or stockpiling of soils, such as excavation, trenching, or grading, can lead to run-off of silt and sediments, which are fine-grained soil particulates. Rain, accidental pipe breaks, or excessive watering from dust suppression can carry these particulates off-site and impair the proper functioning of stormwater drainage systems, cause ecological damage to streams and rivers, or result in adjacent property damage.

Moisture Intrusion & Completed Operations Mold

Installation of wet building materials or errors in the installation of these materials, as well as work on systems such as plumbing and HVAC, can result in trapped moisture or moisture intrusion issues. These issues can result in the growth of mold and bacteria, which pose health hazards to building occupants and can create clean-up liability.

Jobsite Chemical Handling & Completed Operations Pollution

Contractors may bring chemicals, adhesives, solvents, paints, etc., to the site. Accidental releases of products can lead to third-party cleanup, bodily injury, or property damage claims. Once work has been completed and put to its intended use, contractors can still be liable for pollution exposures, at least through the statute of repose, for construction defects or from products or materials installed incorrectly.

Service Station Design & Testing Professional Liability

Service station contractors may provide design services that can result in professional liability. These services may include performing in-house service station design, hiring design firms as subcontractors or through a joint venture, or providing professional opinions on design aspects. Additionally, service station contractors may perform testing or inspection services for existing service station components. Errors and omissions associated with these professional services can result in time delays, budget overruns, and rework.

Waste Transport & Mobile Transit Liability

Transporting waste materials from a construction site by the contractor or third-party carrier 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.

Subcontractor Management & Joint Liability

General contractors may hire subcontractors for whom they are responsible. The actions of subcontractors can become the liability of the project general contractor. Since pollution laws are joint and several, general contractors can be held liable for pollutants caused by a subcontractor.

Hazardous Material Abatement & Renovation Disturbance

Installation, demolition, and renovation work for canopies, convenience stores, or repair facilities can disturb existing asbestos, lead-based paint, mold, or PCBs, leading to third-party bodily injury claims and cleanup liability.

Preconstruction Planning & Value Engineering E&O

Service station contractors can be involved in preconstruction planning, selection of construction materials, or value engineering and provide input on design, construction methods, scheduling, and costs. Contractors may also modify design specifications or material choices while at the jobsite. Malfunctions arising from these inputs/changes create a direct professional responsibility for the contractor.

Excavation Dust & Airborne Particulates

Excavation and trenching activities create dust. Dust consists of tiny particles (particulate matter) that can cause respiratory issues if inhaled. Contaminated dust can cause illness to third parties nearby. Off-site migration can lead to third-party bodily injury and property damage claims.

Construction Waste Disposal & Manifest Liability

Improper disposal of wastes can lead to cleanup costs and environmental tort liability. Hazardous waste inadvertently mixed with construction debris/waste may be disposed of improperly. Investigations for improper disposal at a disposal facility can result in potential liability for all parties that manifested waste to the facility, including contractors.

A Combined Pollution & Professional Liability Policy Can Provide Coverage For

Contracting operations completed “by or on behalf of” the insured

Contracting operations performed at a jobsite

Third-party claims for bodily injury and property damage

Third-party claims for cleanup

Defense of third-party claims

Natural Resource Damage

First-party emergency response costs

Sudden and accidental coverage for owned/leased locations

First and third-party transportation pollution liability

Loading and unloading

Non-owned disposal sites

Mold, legionella, bacteria, and fungi

Lead and asbestos

Silt and sedimentaton

Mitgaton/rectification

Excess/contingent design

Claims Scenarios & Examples

A service station contractor was hired to install a new canopy, dispenser island, underground tanks, and associated piping at an existing retail gasoline service station. During the installation process, the contractor realized the designed pathway for a portion of the conveyance piping would conflict with the former tank system that was abandoned in place. The contractor changed the field design without seeking approval from the original engineering design firm. During excavation, the contractor struck a buried power line, causing an entire city block to lose power. The contractor was found liable due to their negligent design change and was ordered to pay to fix the power line and compensate nearby businesses for lost revenue due to the power outage.
During a renovation project, a contractor upgraded the automatic leak monitoring system on an existing underground storage tank system at a gas station. Soon after, the pressurized underground storage tank system had a loss of product detected by the monitoring system. Upon sensing the release, the automatic electric shutoff relay should have immediately shut down the internal underground storage tank system pump to limit the release; however, the relay malfunctioned, and the internal tank pump continued to pump fuel until one of the workers cut the power. Approximately 600 gallons of the product were released in ten minutes, resulting in a $600,000 cleanup. The station owner sued the contractor who installed the automatic electric shutoff relay.
A contractor excavating a tank pit to install an underground storage tank system inadvertently struck a sewer line, releasing wastewater into the subsurface. The contractor was required to excavate and dispose of the contaminated soil and repair the sewer line at their own cost. In addition, the project was delayed two days due to the contractor’s error.
A subcontractor used drywall stored outside in their yard to construct a convenience store. After the building was completed, mold was found growing in the bathrooms. The service station owner filed a claim against the general contractor for the mold damage caused by the drywall subcontractor.
During the removal of residual fuel from an underground storage tank (UST) system decommissioning, the contractor did not adequately secure the hose to the tanker truck, causing a release of approximately 50 gallons of fuel. The fuel migrated to a drainage ditch, which flowed to a stormwater retention area and contaminated the soil. The contractor had to excavate the contaminated soil and transport it off-site for disposal at their own cost.

Final Consideration

As a contractor you can be faced with the cost to defend yourself 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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