ERP - Environmental Risk Professionals

Water Treatment Process Deficiencies & Contaminated Supply

Water being treated can contain contaminants such as pathogens, biohazards, soil particles and other sediment, heavy metals, animal waste, pesticides, inorganic chemicals, organic chemicals, and radionuclides. The water may not be adequately treated if the plant encounters problems during treatment. Distribution of water that is not adequately treated can cause bodily injury or property damage.

Disinfection By-Products (DBP) & Distribution Pipe Leaching

Some water treatment processes may form disinfection by-products. The piping used to distribute water can also be degraded by the chemical makeup of the treated water and leach contaminants into the water. Water treatment systems must properly control the development of disinfection by-products (DBP), monitor outgoing water for dbp levels, and prevent degradation of downstream piping. Otherwise, distributed water can cause bodily injury or property damage.

Facility Storage Tank Releases & Loading Spills

Underground and aboveground storage tanks may store water treatment chemicals or fuels. Underground storage tanks may leak over time, and the contents have the potential to contaminate the underlying soils and groundwater. Aboveground tanks have the potential to present problems such as leaks from tank bottoms, tank overfills, and ruptures, causing a catastrophic release of tank contents and spills during the loading or unloading process.

Chemical Container Storage & Secondary Containment Defect

Containers (such as drums, totes, or smaller containers) may also store treatment chemicals or petroleum products. If containers are not provided with secondary containment or stored on soil, a release could impact soils or groundwater or migrate in the stormwater run-off to surface waters or nearby properties. Chemicals should be properly segregated during storage, as incompatible materials can create environmental hazards.

Disinfection Gas Releases & Toxic Cloud Exposure

Hazardous chemicals may be used, stored, and disposed of as part of the treatment and disinfection process. Chemicals can include chlorine, ammonia, or sulfur dioxide. Releases of these chemicals can form toxic gases that can cause bodily injury to people near a release. A release of chemicals during transport (by or on behalf of the insured) or loading and unloading can result in environmental cleanup, third-party liability, and natural resource damage.

PFAS "Forever Chemical" Accumulation & Potable Water Liability

PFAS are known as “forever chemicals” because they are difficult to break down once released into the environment. Many water treatment systems have been found to have elevated levels of treated potable water. The presence of these chemicals in potable water could result in bodily injury claims.

Sludge Dewatering & On-Site Processing Pollution

Sludge generated as a by-product of the treatment process can pose potential environmental and public health risks. Sludge may contain pathogens, nutrient pollutants, and chemicals, depending on the composition of the water it was produced from and the treatment process used. A release or leaching from on-site storage or during sludge processing, such as dewatering, digestion, composting, and incineration, can result in soil, water, and air pollution.

Sludge Land Application & Biosolids Disposal Liability

Processed sludge suitable for disposal or land application can still retain contaminants like phosphorus, which can be used as a fertilizer, or heavy metals and chemicals. A release of sludge during transport or loading and unloading can result in environmental cleanup, third-party liability, and natural resource damage. Treatment facilities can also be responsible for the proper use or disposal of the sludge they produce. Sludge used in land applications could create product pollution exposure. If the facility performs the land application, they can carry an off-site service exposure, including improper application or over-application of nutrient pollutants. Sludge wastes brought to landfills can expose facilities to disposal liability.

Filter Backwash Wastewater & Permit Discharge Violations

Filter backwash and other residual wastewater may be generated from water treatment systems and disposed of by discharge to surface water or publicly owned treatment works. Discharges of wastewater with constituent levels above regulatory permit criteria can result in environmental liabilities or regulatory fines.

Distribution Line Excavation & Unknown Soil Contamination

Excavations for new distribution piping or repairs of existing piping can lead to disturbance, relocation, or stockpiling of unknown pre-existing contaminated soil, which can be spread to clean areas of a site or could be improperly disposed of. Cleanup claims, natural resource damage claims, or third-party suits could result.

Treatment Waste Characterization & Disposal Liability

Improper disposal of contaminated materials or misdelivery of unidentified contaminated soil can lead to environmental liability.

Treatment Plant Odor Nuisance & Chemical Gas Off-Gassing

Odors produced can be a nuisance and irritant to neighboring properties, resulting in claims for third-party bodily injury or diminution of property value. The use of chemicals such as ammonia and chlorine and gases produced during treatment, such as hydrogen sulfide, can cause eye, nose, and throat irritation, headache, nausea, cough, chest tightness, nasal congestion, and stress, and could aggravate existing medical conditions such as asthma.

Environmental Pollution Liability Can Provide Coverage For

Integrated GL/Site Pollution, options to include XS, Auto, and WC may be available

Monoline Site Pollution Liability

Third-party claims for bodily injury, property damage

First-party and third-party cleanup

Defense of third-party claims

Emergency response costs

Natural resource damage

First and third-party transportation pollution liability

Loading and unloading

Crisis/reputation management

Civil fines and penalties

Off-site services pollution liability

Business interruption expenses

Non-owned disposal sites

Products pollution liability

Claims Scenarios & Examples

A water treatment plant utilized sulfuric acid in its process. The acid was stored on-site in a 20,000-gallon aboveground storage tank. Two-foot-high, chemically-sealed concrete walls contained the storage tank. Overnight, an area high on the wall of the storage tank ruptured, releasing the acid. The leak squirted beyond the secondary containment, releasing approximately 3,000 gallons of the tank contents onto the soil and into an adjacent stream. The government mandated costs for the cleanup of on-site soil, the stream, and the stream bank. The costs exceeded $1 million.

A complainant alleged that a city, which is the owner/operator of a water treatment plant, violated provisions of the state’s water pollution control laws and failed to comply with the requirements of its National Pollutant Discharge Elimination System (NPDES) permit and its state wastewater discharge permit. The violations included improper storage of dewatered sludge and improper storage of liquid sludge in a holding lagoon at the plant, resulting in the placement of pollutants likely to discharge to a nearby river protected for water contact recreation and aquatic life. In addition to a $25,000 administrative penalty, the order required the city to remove and dispose of the contents of the lagoon and perform groundwater monitoring to show there was no prior leakage from the lagoon.

The operator of a small water treatment plant received a bulk shipment of sodium hypochlorite solution used in the treatment process at the facility. Unfortunately, the valve connecting the hose to the tank was not secure. Before the vendor and operator realized what had happened, a significant amount of sodium hypochlorite was released. The chemical ran down the parking area into a small culvert on a neighboring property. The vendor was able to close the valve, but the spill had caused the culvert and surrounding soil to be contaminated. Fumes from the release caused an adjacent manufacturing operation to be evacuated. The cost to neutralize sodium hypochlorite and remediate the spill was significant, and the company was also fined.

While performing excavations for new water distribution piping, a contractor working on behalf of a water treatment plant hit a natural gas line, evacuating the immediate area, including an adjacent strip mall. Store owners filed loss-of-business claims against the contractor and the water treatment system owner, which exceeded $75,000. The water treatment system’s off-site services pollution coverage provided a defense for the claim.

A sludge dewatering tank failed at a water treatment facility, releasing wastewater to a storm drain that discharged to a local creek. The release of the wastewater caused increased turbidity, pH, and chlorine levels in the creek. The release resulted in monitoring, cleanup costs, and fines for the water treatment plant operator.

Faulty equipment at a water treatment plant caused the release of toxic chlorine gas into the air. Area residents and businesses were evacuated, and several people were hospitalized for inhalation of fumes. Bodily injury claims totaled $70,000, and business interruption claims totaled $120,000.

The City of Flint, Michigan, changed its water source from treated Detroit Water and Sewerage Department water (sourced from Lake Huron and the Detroit River) to the Flint River. Officials failed to apply corrosion inhibitors to the water, and a series of problems culminated with lead contamination, creating a serious public health danger. Between 6,000 and 12,000 children were exposed to drinking water with high lead levels. An outbreak of Legionnaires’ disease that killed 10 and affected 77 people is also linked to the water source change. Under a settlement agreement, Flint residents would be eligible for payments from a $600 million victim compensation fund.

Property Types

Water Treatment Plants

Environmental Exposures May Include