ERP - Environmental Risk Professionals

Dry-Cleaner Perc Leak Migration

Strip malls can have current or past dry-cleaning tenants. Dry cleaners utilize chemicals such as tetrachloroethylene (PCE) (perchloroethylene or “Perc”) in their operations, which has been identified as a human carcinogen. Releases or leaks from equipment can migrate through cracks in concrete floors and reach the subsurface soil and groundwater. Perc is heavier than water and can sink deep into the groundwater and soil, and contamination can persist. Vapors from the 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 also expose the property owner to environmental cleanup and tort liability.

Mold

Mold growth can result from water and wastewater releases into building materials and subsurfaces 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. Mold exposure may pose health hazards to building occupants, including severe respiratory issues and systemic toxicity, and can absorb into building materials creating cleanup liability.

Legionella

Legionella is a bacterium that causes a form of potentially fatal pneumonia. Legionella can thrive in water-containing systems, including large air conditioning, heating, and industrial water cooling systems. Adequate warm temperatures and inadequate chlorination may result in Legionella growth and airborne dispersal. Exposure of third parties to Legionella can result in Legionnaires’ disease, Pontiac fever, or severe complications of existing respiratory diseases such as asthma, emphysema, and COPD.

"Sick Building Syndrome"

Indoor air quality can pose environmental risks in buildings. “Sick Building Syndrome” refers to a situation where building inhabitants suffer from health problems that occur and are aggravated while in a building. Sick Building Syndrome is often attributed to poor design, maintenance, or a faulty ventilation system. Along with asbestos, lead, mold, and bacteria, many other exposures can contribute to an unhealthy indoor environment, including chemicals stored on-site or found in building materials, combustion products such as carbon monoxide and nitrogen dioxide, pesticides, and volatile organic compounds.

Asbestos, Lead and PCBs

Older buildings may contain asbestos, lead, and PCBs. Asbestos can be found in ceiling and floor tiles, wall insulation, and wiring insulation. PCBs can be found in areas such as window caulk and light ballasts. Lead could be present in paint or pipes. Lead in pipes can get into drinking water, and paint chips and dust from lead-based paint can be ingested. Exterior lead-based paint can also leach into the soil around the structure. Leading claims may result from accidental disturbance or alleged exposure during renovation, construction, or interior remodeling.

Restaurant Grease

Restaurants and fast food establishments may have grease traps on-site. Leaks or poor maintenance of grease traps can result in a release that can contaminate soil or groundwater, clog drains or sewer lines, cause natural resource damage, and expose bacteria and infectious diseases to third parties that come in contact with it. Leaks or spills during the loading and unloading of grease waste can also lead to environmental cleanup and tort liability.

Loading and Unloading

During loading and unloading operations, leaks from delivery trucks of fuel, oil, and other automotive fluids on the property can migrate or collect in stormwater and leach into the ground or discharge into water systems. Polluted run-off from paved surfaces, such as parking lots, collects fuels, oil, and chemicals and can discharge them into water systems.

Storage Tanks

Above and underground storage tanks are frequently utilized to store potential pollutants such as fuels, heating oil, and lubricants. Tenants may also install tanks for storage, including gas stations and dry cleaners. Smaller volumes of materials, such as cleaning agents, pesticides, and fertilizers used for landscaping activities, are often stored and used on-site. Leaks or spills can contaminate soil and groundwater and pollute stormwater run-off.

Chemical Storage

Tenants may use and store chemicals related to their operations. Outside chemical storage can contact stormwater, leading to contaminated run-off. Improper handling or disposal, or an accidental release, could result in an environmental cleanup or hazardous air emissions. Chemicals could also be abandoned by the tenant when they vacate, leaving the burden of characterization and disposal on the property owner.

Contractors 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

Civil fines and penalties

Claims Scenarios & Examples

After filing for bankruptcy, a dry cleaner closed down their business and abandoned their unit at a strip mall. The dry cleaner left behind perchloroethylene (PERC), which contaminated the area. The strip mall owner had to absorb the $250,000 business interruption costs and $750,000 in remediation costs.

Two 250-gallon storage tanks were used to store propane for cooking at a strip mall. One night there was a propane gas leak, resulting in an explosion. Three stores within the mall were destroyed, and homes within a 2-mile radius had debris on their property and their windows shattered. A hazardous materials team responded, and one firefighter had to go to the hospital due to inhaling smoke while on the scene.

Department of Environmental Quality (DEQ) officials were working at a strip mall to remediate vapors that resulted from chemicals used in dry-cleaning operations and metal degreasing when they found storage tanks under the building in a crawl space that was leaking. The county’s health division required that all businesses in the strip mall close down due to the potential leak. It was discovered that the chemicals in the tanks were tetrachloroethylene and petroleum byproducts associated with a dry-cleaning business and gas station that had previously been on the property. The tanks were removed, and vapor barriers and air filtration devices were installed in the facility. The DEQ continued to monitor the air quality at the strip mall.

Contamination was found at a strip shopping center due to dry-cleaning operations. A third of the facility had to be demolished, and soil had to be excavated 20 feet below where the dry-cleaning operations had taken place. After all the remedial work, reconstruction then took place. Most of the shopping center stores had to close down during the work. The facility owners said the environmental cleanup alone was approximately $1 million.

A winery located at a strip mall sued the landlord for mold that potentially contaminated their wine. An outside company was hired to test for mold and found potentially toxic mold spores in the building structure. The winery sought $215,000 in restitution for its product contamination and business loss.

Residents in a neighborhood complained of several incidents where a greasy substance was found seeping along the street. The county Department of Health investigated and found that a nearby strip mall with several restaurant tenants was responsible. The incidents were believed to be caused by a few sources from the strip mall, including water run-off from an A/C unit that picked up surface grease, a ruptured grease trap, and a main sewer line clogged with grease from tenant restaurants. A hazardous materials team responded to clean up the grease, and the strip mall was responsible for cleanup efforts. They also faced fines if problems persisted.

A new tenant signed a lease with a retail strip mall and started renovating and customizing the space. During the renovation, mold was found in the unit that looked to be from prior water damage caused by a leaking pipe. The strip mall owner faced remediation and business interruption expenses, as they could not collect rent during the remediation work.

An owner of several strip malls purchased property to add to their portfolio. The original builder had used clay pipes for the sewer system. One of the units of the mall was a photo processing lab. When processing film, the lab used silver and would dispose of their liquid waste through the plumbing (before environmental regulations were put into place). This waste in the clay pipes caused degradation, and the pipes cracked and released the waste both before and after the new owner purchased the property. It was found that the surrounding soil and groundwater were contaminated, and the owner was stuck with high remediation costs.

Property Types

Strip Malls

Environmental Exposures May Include