VERTEX was retained by an international property and casualty insurance carrier to assist them in their review of claimed damages for remediation costs submitted by an insured pursuant to an environmental/pollution insurance policy, pertaining to a bulk liquid petroleum storage facility located on the Mobile River in Mobile, Alabama.
In November 2023, during a delivery and offloading of an oil tanker at the site, the Insured identified a leak in the receiving vessel, a carbon steel aboveground storage tank at the facility. Crude Tall Oil (CTO) was found to be leaking out of two locations at the bottom perimeter of the tank. Upon discovery of the release, the Insured began transferring the petroleum product into a different tank at the site, to limit product loss. Environmental remediation activities included vacuum truck recovery of CTO pooled on the ground surface, the excavation and off-site transport and disposal of oil-contaminated soil, and restoration/backfilling of excavated areas.
VERTEX was asked by the carrier to review incurred damages/invoicing submitted by the Insured, comprised of 102 invoices totaling approximately $1.8 million, for reasonableness and necessity. VERTEX’s review identified invoiced costs totaling approximately $575,000 that were found to pertain to activities relating to management of the oil in the leaking tank and transfer of the oil into a different tank. These activities were not considered by VERTEX to be related to remediation of environmental impacts from the release, for which the Insured’s policy provided coverage. As such, VERTEX’s analysis and findings resulted in the carrier’s reduction of the claimed loss amount, in accordance with applicable provisions of the Insured’s policy, by a significant amount (approximately 30%).
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.
