Pollution & Environmental Concerns with Fuel Tanks

There has been rising concern about the exposure that underground / above storage tanks present for the community owners.

These tanks usually have a capacity of 275 gallons of fuel oil to heat an individual home. In the majority of the communities where these tanks exist, many are over ten years old. What problem does this present for the community owner?

From an insurance standpoint, it is important to note that pollutants of any kind are excluded coverage on all underlying commercial, general liability coverage forms. This applies to bodily injury or property damage arising out of the actual alleged or threatened discharge, dispersal, seepage, migration, release or escape of pollutants. In short, there is no coverage for the clean-up or disposal of any pollutants including heating oil.

Who can be held responsible for a resident’s tank rupturing? If a resident’s oil tank ruptures, the cost of the clean-up could be born by both the resident as the owner of the tank and the landlord as the owner of the property. However, you as the property owner is ultimately responsible for all pollutants on or migrating from your property. If a spill or leak occurs, the environmental agencies overseeing the clean-up would most likely place the financial responsibility on a landowner because he has the better ability to pay.

Can you buy pollution insurance to cover this situation? Yes, however this would depend upon the safeguards, age and size of each tank. Some communities would not qualify for pollution insurance because older homeowner oil tanks do not meet the safety or construction requirements of the insurance company. The insurance company would require the tanks be updated and many times it is less expensive to change to propane or gas and just eliminate the oil situation.

If you should have any additional questions, please call Jim Freyer, Jr. at 1-800-289-1501.