BROCHURE: UNDERSTANDING THE UNDERGROUND STORAGE TANK POLICY–DESIGNATED TANKS

(November 2022)

Nearly every commercial property owner or operator with an underground storage tank that contains petroleum products must comply with the federal Environmental Protection Agency (EPA) rules and regulations. The regulations revolve around notification of their existence, testing them for leaks, and retrofitting and monitoring them to comply with the requirements. The EPA also establishes minimum financial responsibility requirements for you as an owner or operator. The Underground Storage Tank Policy–Designated Tanks provides coverage to meet your financial responsibility requirements for such underground petroleum product storage tanks. It does not apply to tanks that contain any other hazardous substances.

The Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) defines an underground storage tank as any tank with 10% or more of its volume below ground. The definition also includes any piping attached to the tank. As a result, this definition applies in cases where the tank itself is physically above ground but has a significant amount of piping, plumbing, pumping, or other equipment below grade level.

Consult the policy for definitions and limitations. The terms of this brochure do not represent contract terms. The policy is subject to company underwriting practices.

WHAT IS COVERED

The Underground Storage Tank Policy–Designated Tanks pays amounts you are legally required to pay because of bodily injury or property damage that an underground storage tank incident causes. It also pays amounts you are legally required to pay for corrective action costs that result from a covered underground storage tank incident. An incident is any spilling, leaking, emitting, discharging, escaping, leaching, or disposing of petroleum from an underground storage tank into ground or surface water or subsurface soils.

The policy also provides a specific amount for defense costs of either of the coverages described above. These payments apply even if you assume control of defending a suit.

WHAT IS NOT COVERED

Every insurance policy or coverage form has certain exclusions and limitations. This is because only specific types of businesses need the coverage or the risk or exposure to loss is not considered insurable for one or more reasons. The exclusions are:

• Expected or Intended Injury
• Contractual Liability
• Workers Compensation and Similar Laws
• Employer’s Liability
• Damage to Certain Property
• Failure to Comply With Environmental Laws
• Certain Corrective Actions
• War
• Electronic Data

Always review the policy carefully for other limitations and details of the exclusions.

CONDITIONS

Conditions are obligations you owe the insurance company as well as obligations the insurance company owes you when a loss occurs.

• Bankruptcy
• Duties in the Event of an Underground Storage Tank Incident
• Legal Action Against Us
• Other Insurance
• Premium Audit
• Representations
• Separation of Insureds
• Transfer of Rights of Recovery Against Others to Us
• Policy Issued to Comply With law Or Regulation
• Cancellation
• Nonrenewal
• Financial Responsibility and Reimbursement
• Examination of Your Books and Records
• Inspections And Surveys
• Premiums
• If You Are Permitted to Retain Defense Counsel
• Transfer of Duties When a Limit of Insurance or the Defense Expense Amount Is Used Up

DEFINITIONS

Refer to the policy for a list of defined terms.

ENDORSEMENTS

This policy provides fairly narrow coverage. For this reason, the number and type of endorsements available to modify or adjust it are limited.

Note to subscribers:

Related Article: Underground Storage Tank Policy–Designated Tanks Endorsements Checklist

REPRINT PERMISSION

PF&M subscribers in any manual or electronic form are permitted to reprint any portion of this brochure for their commercial insurance customers. Other uses require permission from The Rough Notes Company, Inc.