VERTEX was retained by an international property and casualty insurance carrier to assist them in their review of claimed remediation costs and associated documentation (technical reports and invoicing) related to a release of gasoline from underground storage tanks (USTs) at a service station site in Hawaii.
VERTEX’s review identified significant costs submitted (>$100,000) related to the excavation and scrapping of three USTs removed at the Site by the Insured, who was replacing their existing tank system with a new one, and to the installation of the new replacement tanks. In our analysis, VERTEX segregated these UST removal and replacement related costs from associated incremental costs incurred by the Insured for the excavation and off-site disposal of petroleum-contaminated soil impacted by releases from the tanks. It was found that the former costs would have been incurred in removing and replacing the tanks regardless of whether or not the tanks had leaked and impacted soil, as partially supported by a tank removal and replacement cost proposal submitted to the Insured by their contractor who performed the work, prior to the identification of product leakage from the tanks or discovery of any environmental contamination at the site. This analysis was further supported by review of the environmental consultant’s daily field logs and soil volume data contained in their tank closure report.
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