VERTEX was retained by a property and casualty insurance carrier to assist with their review of remedial costs from a claim made by an insured LLC entity originating from a fire and subsequent explosion of an isobutylene aboveground storage tank (AST) at the subject property, which is a petrochemical manufacturing facility located at Crosby, Texas.
The explosion of the isobutylene AST released petroleum products onto the ground surface. Following firefighting efforts, petroleum compounds migrated onto surface soil and into drainage ditches surrounding the subject property. The Insured retained various environmental contractors to perform the following remedial activities: air monitoring; excavation and disposal of impacted soils; installation and maintenance of booms to prevent further migration of petroleum impacts of the drainage ditches; and vacuuming and disposal of impacted water within the ditches.
VERTEX was asked to review approximately $8.5M in remedial costs associated with the subject loss. Of the $7M in costs, VERTEX identified $3M in disputed costs. Disputed costs were associated with the following categories, which were unrelated to the remediation of the subject loss: firefighting activities; removal and disposal of clean steel and concrete; excessive contractor markups; removal of petroleum products within intact tanks; and excessive fees and surcharges.