{"id":186,"date":"2007-07-10T09:39:26","date_gmt":"2007-07-10T13:39:26","guid":{"rendered":"http:\/\/www.environmentalriskmanagers.com\/erm\/environmental-expsoures-for-auto-dealer-and-repair-facilities\/"},"modified":"2007-07-10T09:39:26","modified_gmt":"2007-07-10T13:39:26","slug":"environmental-expsoures-for-auto-dealer-and-repair-facilities","status":"publish","type":"post","link":"https:\/\/estrategist.com\/members\/environmental-expsoures-for-auto-dealer-and-repair-facilities\/","title":{"rendered":"ENVIRONMENTAL EXPSOURES FOR AUTO DEALER AND REPAIR FACILITIES"},"content":{"rendered":"

Common environmental exposures encountered at car dealerships, gasoline\/service stations, and garages include: Leaking underground fuel and waste oil storage tanks; Untested underground fuel & waste oil\/solvent tanks and pipes; Underground tanks which were removed\/abandoned; Lack of information on existing and former underground tanks (e.g. age, contents, size, construction, cathodic protection, etc.); Poor housekeeping resulting in oil, fuel, parts cleaning solvents, and paint being spilled on unpaved areas; Leaking grease traps or oil\/water separators that seriously pollute the soils and\/or groundwater; Accumulated old batteries which contain leached acidic liquids; Wastewaters flowing from service bays into the sanitary sewers; Electrical equipment containing PCBs; Paint residues from the body shop washed into storm drains; Wash waters from a car wash discharged into a storm sewer; No auditing of waste handling and disposal companies; Poor information on the possible adverse reactions and interactions of chemical compounds that accidentally commingle during a fire. Some of the pollutants these operations are impacted by include asbestos, lead, mercury, cadmium, oil, diesel, etc. <\/font><\/p>\n

1. An automobile dealership had a wash bay’s piping system that released a substantial amount of cleaning solvents into soil and ground water. The cost to remediate the cleaning solvents, soil and ground water cost $250,000<\/font><\/p>\n

2. A service station had a waste hauler that was transporting its used motor oil overturn and spills its load into a nearby stream. Under CERCLA, the service station must contribute for their apportionment of the load for cleanup cost since federal law states that you own your waste from cradle to grave. Cost to settle the claim for the service station was $600,000.<\/font><\/p>\n

3. A waste facility for an auto body shop released contaminates into a nearby neighborhood’s drinking water. The local regulatory agency designated the body shop as a responsible party. The contribution to settle the claim was $340,000. <\/font><\/p>\n

Risk Transfer Strategies<\/strong><\/font><\/p>\n

The majority of automotive salvage yards operating today, lack the financial strength to self insure their environmental liabilities. Consideration needs to be given to the economies of scale afforded with environmental liability insurance as part of your risk transfer strategy.<\/font><\/p>\n

Consider the three main benefits environmental liability insurance affords: <\/font><\/p>\n

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  1. Coverage includes defense cost. Environmental liabilities are relatively new and very litigious. Even if you do nothing wrong you can still get named in a suit and have to expense defense dollars to get released. At one time, Superfund had .83 cents of every dollar going to legal fees, and only .17 cents for actual cleanup. When you realize the average Superfund site cost in excess of $30,000,000 to clean up, you can begin to understand just how big of a factor defense costs play in your risk transfer strategy.<\/font><\/li>\n
  2. All policies come with experts to assist you in handling the claim. Anytime you can have the EPA, state and local environmental officials along with the press pounding on your door, this is not a fender bender, you need experts to assist you in running damage control central.<\/font><\/li>\n
  3. The majority of the time the cost to clean up the environmental problem\/s is far less than the associated claims that come in from third parties, mainly for business interruption. You need to look at the customers and neighbors that can be impacted should an environmental loss occur. Who can you impact should you or a sub-contactor\/vendor cause an environmental liability? <\/font><\/li>\n<\/ol>\n

    Three environmental risk transfer products for Automotive Salvage Yards:<\/strong><\/font><\/p>\n

    ENVIRONMENTAL IMPAIRMENT LIABILITY (EIL) <\/strong><\/font><\/p>\n

    EIL is for automotive salvage yards susceptible to economic loss caused by pollution that actually or allegedly originated from their operations. Sometimes referred to as pollution legal liability this coverage is for those who own, operate, lease, or have any other insurable interest in real property and the operations. Coverage can be written in a variety of ways addressing unknown preexisting conditions or new conditions. Coverage can include third party bodily injury and property damage along with business interruption and extra expense, on and off site clean up costs, legal defense expenses, non-owned disposal sites, transportation and more. EIL can be offered on multi year terms. Most EIL policies cover above ground storage tanks.<\/font><\/p>\n

    TRANSPORTATION POLLUTION LIABILITY<\/strong><\/font><\/h2>\n

    Generally, Business Auto or Truckers policies will exclude pollution losses arising from spills or other releases of their cargo. Broadened auto pollution liability (typically Form CA 9948) affords coverage during the loading, unloading and transportation, for a spill, release or sudden upset and over turn of transported cargo. <\/font><\/p>\n

    UNDERGROUND STORAGE TANKS <\/strong><\/font><\/p>\n

    Financial responsibility requirements ensure that owners and operators of underground storage tank systems have the ability to financially handle a release from an underground storage tank. The responsibility encompasses the ability to pay funds for corrective action and third party bodily injury and property damage from non-sudden and sudden and accidental releases from a regulated underground system. <\/font><\/p>\n

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