VERTEX was retained by an international property and casualty insurance carrier to assist them in their review of claimed damages/costs incurred for remediation of a release of crude oil at a bulk liquid petroleum storage and distribution facility located in Tacoma, Washington. In December 2023, approximately 84,000 gallons of crude oil were released from a 360,000-gallon aboveground storage tank at the Insured’s facility, due to a catastrophic failure of the tank’s mixing apparatus. The tank was situated within an unlined containment area and the oil did not escape from the containment. Upon discovery of the release, as a safety measure, the Insured applied approximately 7,400-gallons of an aqueous film forming foam (AFFF) suppressant to address vapors forming above the crude oil. The AFFF suppressant contained per- and polyfluoroalkyl substances (PFAS), which are considered an emerging contaminant by the U.S. Environmental Protection Agency (EPA).
VERTEX was asked by the carrier to review incurred damages/invoicing submitted by the Insured, consisting of approximately 250 invoices totaling approximately $5.8 million. As part of this project, VERTEX was asked to identify and quantity costs related to PFAS remediation, for which there was an exclusion in the Insured’s policy. VERTEX’s review also identified restoration costs associated with facility upgrades/capital improvements, including installation of a clay and geomembrane liner in the tank containment area, not previously present, for which the policy also did not provide coverage.
Of the submitted costs, VERTEX’s review identified invoiced costs totaling approximately $2.5 million that related to PFAS remediation activities and facility upgrades/capital improvements. As such, VERTEX’s analysis and findings resulted in the carrier’s significant reduction of the claimed loss amount, in accordance with applicable provisions of the Insured’s policy.
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.
