ERP - Environmental Risk Professionals

Storage Tank Releases & Off-Site Migration

The release of petroleum products or hazardous materials from storage tanks may migrate or collect in run-off and enter storm drains or drywells, potentially contaminating surface waters or drinking water sources such as municipal and privately owned wells. Natural resource damage may occur and result in claims. The release may also damage the local sewer system or contaminate nearby properties, resulting in third-party claims for cleanup, property damage, or bodily injury.

Bulk Fuel Loading & Unloading Transfer Spills

Releases or spills from storage tanks may occur during material loading or unloading, leading to soil, groundwater, or surface water contamination. Releases may negatively impact local drinking water sources and cause damage to natural resources such as fish, wildlife, and biota.

Petroleum Tank Vapor Emissions & Air Quality Hazards

Air emissions from releases of petroleum products or hazardous materials may cause serious health problems to exposed individuals that could lead to bodily injury claims against the owner or operator of the tank.

Dispenser Leaks & Surface Sheet Flow Contamination

Releases of chemicals or petroleum products can occur from dispensers, contaminate the underlying soil and groundwater or sheet flow across the surface, and reach nearby storm or sewer drains or adjacent properties.

Aboveground & Underground Piping System Leaks

Product piping for storage tanks may be aboveground or underground, depending on the system design. Releases of contents could occur from damage to the piping system, including leaks from joints, elbows, and check valves that could contaminate soil and migrate to and negatively impact groundwater.

Catastrophic Aboveground Storage Tank Rupture

A catastrophic failure or a leak from an AST caused by an accident or rupture of the tank could cause a release of the contents to the environment. The release could enter nearby streets, storm drains, and drywells, contaminating the area where the AST is located.

Secondary Containment Defect & Breach Releases

The secondary containment for aboveground storage tanks may become damaged or cracked, releasing any liquids that may have built up over time due to minor spills associated with the tank. The release could contaminate the soil at a site or impact groundwater if the contaminants are not detected and responded to early enough. The released product could also migrate off-site contaminating nearby properties, resulting in cleanup and third-party bodily injury or property damage claims.

Undetected Underground Storage Tank (UST) Seepage

A UST system may have leaks that go undetected. During a subsurface investigation, contamination may be discovered, potentially leading to expensive investigation and cleanup of the release.

Storage Tank Liability Coverage Options Can Include

Third-party claims for bodily injury

Third-party claims for property damage

Third-party claims for spill cleanup

Corrective action costs for on-site and off-site cleanup

Diminution of property value

Defense expense for third-party claims

Emergency response expense

Natural resource damage

Loading and unloading

Reputational damage and image restoration

Civil fines and penalties, where allowed by law

Financial responsibility coverage to address state/federal regulations

Claims Scenarios & Examples

A delivery driver made his last stop at a service station closest to his home at 10 p.m. and unloaded 10,000 gallons of fuel. The next morning, the same driver returned to the same store and proceeded to unload 10,000 gallons more, only this time, it seeped out of the vents in the system and out into the road. A discarded cigarette ignited the trail of gasoline, and the service station exploded, killing seven people. The carrier for the tank policy paid a claim under the loading and unloading coverage (subrogated against the tanker firm).

A service station owner performing regular tank tightness testing on his fuel systems discovered a leaking underground tank supply line. Subsequent soil sampling identified diesel fuel pooling around the tank. The tank was excavated, and the contaminated soils were removed and disposed of at an off-site waste facility. Total costs for investigation, remediation, and disposal were $368,000.

A gas station owner reported a claim when gasoline was discovered coming up through the concrete pad associated with the fuel dispensers. The gas station owner confirmed the release, and excavation and remediation began. It was determined that the underground storage tank system was leaking from several areas (piping, sumps, and the tank itself), and the contamination was more extensive than originally thought. The cost of cleanup exceeded the insured’s $1 million policy. An additional $100,000 was spent on legal fees associated with regulatory compliance issues.

A gas station customer drove away with the fueling nozzle still in his car. The hose broke off, releasing more than 150 gallons of fuel onto the concrete pad, which ran into the adjacent asphalt street. Several sections of eroded asphalt were repaired and replaced, and the spilled fuel was cleaned up with total costs exceeding $750,000 for remediation and third-party property damages.

A property owner complained of gasoline odors emanating from a storm sewer leading from an adjacent service station. The service station had numerous underground storage tanks containing various gasoline grades. An investigation of the service station’s leak detection records indicated that one of the storage tanks was leaking and several hundred gallons of gasoline were missing. Further investigation revealed that the gasoline had contaminated the service station’s site, migrated onto a neighboring property, and into drinking water wells through the storm sewer. Extensive cleanup of the service station and mitigating third-party property damage resulted in significant costs.

A recycling facility used sulfuric acid and stored it onsite in a 20,000-gallon aboveground storage tank. The storage tank was contained by two-foot-high, chemically sealed masonry walls. Overnight, an area high on the wall of the storage tank ruptured, releasing sulfuric acid. The leak flowed beyond the containment, releasing approximately 3,000 gallons of the tank contents into the soil and an adjacent stream. Government-mandated costs for cleanup of on-site soils, the stream, and the stream bank exceeded $1 million.

A manufacturing plant experienced an oil spill on their property. The spill resulted from a broken supply line to an aboveground storage tank on the property. Seven hundred barrels of oil were released into ditches on both sides of a roadway adjacent to the property and a neighboring river. The stormwater ditches also discharged into the river. In all, approximately 100 barrels entered the river. Local and federal regulatory agencies were notified, including the U.S. Fish and Wildlife Service. The insured was charged with the remediation efforts. The total cost for remediation associated with the oil spill was $2.3 million. Approximately 200 tons of soil were excavated, and 600 barrels of product were removed through land remediation activities.

An electroplating operation released approximately 3,640 gallons of chromic acid from an underground storage tank, contaminating the local groundwater with hexavalent chromium. The acid seeped into basements in the surrounding community and was not addressed until after the company ceased operations, the factory building was demolished, and initial remediation began. During decommissioning of the facility, 5,700 tons of chromium-contaminated soil, 1,150 tons of concrete, 600 cubic yards of debris, 325 drums of hazardous waste, and 6,100 gallons of polluted water were removed. Over 500 homes were inspected, and 14 basements were remediated for $5 million. An additional $37 million was estimated to address long-term remediation.

An oily sheen was observed on a local stream. It was traced back to a leak from an underground storage tank at an insured 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 remediation and natural resources damages totaling $450,000.

Corrosion in an aboveground storage tank caused a leak that contaminated soil and groundwater. The remediation costs were $270,000.

Insurance Products

Storage Tank Liability

Environmental Exposures May Include