In life, there are both good and bad surprises. Finding two leaky oil tanks
buried on association property definitely qualifies as a bad surprise.
That’s the nightmare one condominium association insured by CAU recently faced.
While cleaning up from a flood in its boiler room, a plumber noticed oil
floating on the water. An investigation soon turned up the source of the oil.
There were two underground storage tanks (USTs) buried on the property that
nobody knew were there. They had been capped off 25 years ago when the property
was converted from apartments to condominiums and now they were rusted through.
The tanks were leaking oil into the soil and ground water, and tests confirmed
major contamination. For awhile, the association feared that the contamination
had spread to an adjoining property that it did not own. Although that turned out
not to be the case, the association was still facing a staggering clean-up bill.
Due to the increase in recent years of reported claims like this one, many
insurance providers have removed pollution coverage from their policies.
Fortunately for this association, CAU is not one of them. In fact, CAU’s
Environmental Impairment Liability (EIL) coverage is what saved this association
from a major financial hit.
As part of the coverage, a pollution liability expert was hired to investigate
the loss, and a remediation plan was soon put in place. Approximately 1,000 tons
of soil was removed and ground-water monitoring wells were installed. Today,
ground water samples continue to be taken and, while residual pollutants continue
to show up, the concentrations are low and are above standards.
Because the association did not know the oil tanks were there, the EIL coverage
paid for the $142,000 in testing and remediation efforts needed (known USTs are
excluded from EIL coverage unless specifically scheduled on the policy). If the
neighboring land had been contaminated, EIL coverage would have paid for that
clean up as well.
Environmental claims like this impose a tremendous financial burden on associations
that do not have adequate coverage. This association may have dodged a bullet
considering what they might have had to pay without CAU’s Environmental Impairment
Liability coverage.
Click here for more information about
CAU’s Environmental Impairment Liability
coverage.