VERTEX uses cookies to make our website work properly and to provide the most relevant content and services to our clients and site visitors.

Articles

Chemical Fires – Claim Investigation & Management

March 13, 2019

Chemical fires can occur at properties that store hazardous chemicals. Due to the potential release of a multitude of chemicals and emergency responses from hazardous materials spill response teams, firefighters, and emergency remediation contractors, chemical fires lead to expensive and complicated losses. Chemical fires often destroy the site building and involve building, property, and pollution claims. 

Chemical Fire Investigations

Complications can arise as a result of chemical fire claims. To properly investigate the claim, there are best practices to be followed. Proper documentation must be collected from the insured regarding chemical inventories to assist in properly identifying potential pollutants that may have been released. Additionally, environmental media can be impacted by the chemical release associated with the fire, including soil, groundwater, surface water and air. Chemical releases from these fires can lead to fish kills, water use advisories, and air quality issues, resulting in regulatory fines and additional costs for the loss. Property and building adjusters should be consulted in order to determine appropriate remediation allocations between environmental, property, and building policies.

Claim Management

Oftentimes, chemical fires can be stressful for the insured. Determining the appropriate contact at the organization will ensure an expedited transfer of information and data from the remedial work. VERTEX has extensive experience reviewing $1M+ emergency remediation invoices under expedited time constraints. Our nationwide presence allows us to understand what additional remediation work is required to obtain site closure with either the state and/or federal regulatory agency. We will work with the insured and remediation contractor to calculate an Estimated Closure Budget (ECB) for the client if requested.

Invoice Reviews

With these types of claims, it is important to review and negotiate contractor rates and invoices to determine the reasonableness and necessity of invoiced costs. Contractors will often apply unreasonable markups or per diems over the United States General Services Administration (GSA) rate for the remediation location. We have also found that contractors will rent equipment for weeks to months instead of purchasing the equipment for the remediation, leading to significant cost increases. The contractors’ mileage charge will also be reviewed to ensure that it complies with the Internal Revenue Service’s standard mileage rate. Upon request, invoice reviews can be expedited for our clients.

How Can VERTEX Help?

Chemical fires can lead to the release of significant volumes of a variety of hazardous chemicals. These releases can impact soil, groundwater, surface water quality, and air quality. VERTEX understands the complexity and stress associated with chemical fires for the property owners. Our environmental claims experts will work with all the involved parties to determine the appropriate allocation for the remedial aspect of the claim and, when necessary, dispute excessive charges in invoices such as mileage rates, per diem rates, labor and equipment cost, and fuel surcharges. 

VERTEX continues to provide guidance and perform chemical fire claim investigations and management for our clients. If you have any questions regarding chemical fires and their management, please reach out to Michael Bator.

To learn more about VERTEX’s Environmental Claims Consulting services or to speak with an Environmental Claims Expert, call 888.298.5162 or submit an inquiry

Back to Insights
Sign up for More Insights