{"id":2636,"date":"2022-05-08T22:30:05","date_gmt":"2022-05-08T22:30:05","guid":{"rendered":"http:\/\/estrategist.com\/website\/members\/?p=2636"},"modified":"2022-05-08T22:30:05","modified_gmt":"2022-05-08T22:30:05","slug":"auto-dealers-service-garages","status":"publish","type":"post","link":"https:\/\/estrategist.com\/members\/auto-dealers-service-garages\/","title":{"rendered":"Auto Dealers & Service Garages"},"content":{"rendered":"

What is a Pollutant?\u00a0<\/strong><\/p>\n

Any material, substance, liquid, product, etc\u2026 which is introduced into an environment for other than its intended use \/ purpose. In other words, something that ends up where it doesn\u2019t belong. Fresh water, cheese, and milk have all been classified as pollutants by Insurance Carriers under various circumstances.\u00a0<\/span><\/p>\n

Most commercial insureds assume that claims arising from their operations are covered by the general liability policy. However, claims resulting from a \u201cpollution incident\u201d are excluded from most general liability policies, which leaves commercial insureds with gaps in coverage. What pollutants are impacting your business?<\/span><\/p>\n

Environmental Exposures Impacting Auto Dealers & Service Garages<\/strong><\/h3>\n

Nationwide, car and truck dealerships, service stations, and garages take care of the maintenance and repair of millions of vehicles every year. In every area of vehicle servicing, repair, and body shop operations there is potential for environmental risk. Dealerships and garages are responsible for proper storage and disposal of their hazardous waste on site and at off-site treatment, storage or disposal facilities. Environmental Insurance provides the financial assurance needed for sustainability in today\u2019s social\/business environment.\u00a0<\/span><\/p>\n

Environmental exposures impacting car dealerships may include, but are not limited to;<\/b>\u00a0 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;\u00a0 Leaking grease traps or oil\/water separators that seriously pollute the soils and\/or groundwater;\u00a0 Leaks from elevator hydraulic fluid storage tanks;\u00a0 \u00a0\u00a0Accumulated old batteries which contain leached acidic liquids;\u00a0 Wastewaters flowing from service bays into the sanitary sewers;\u00a0 Electrical equipment containing PCBs;\u00a0 Paint residues from the body shop washed into storm drains; Wash waters from a car wash discharged into a storm sewer;\u00a0 No auditing of waste handling and disposal companies;\u00a0 Poor information on the possible adverse reactions and interactions of chemical compounds that accidentally commingle during a fire.\u00a0 Some of the pollutants these operations are impacted by include asbestos, lead, mercury, cadmium, oil, diesel, etc.;\u00a0 and more\u2026<\/span><\/p>\n

Environmental Claim Scenarios<\/strong><\/p>\n

    \n
  1. An auto dealership had a wash bay\u2019s piping system that released a substantial amount of cleaning solvents into soil and ground water.\u00a0 The cost to remediate the cleaning solvents, soil and ground water cost $250,000.<\/span><\/li>\n
  2. While working on renovations at an auto dealership, an excavation contractor was subject to cleanup costs and business interruption expenses in excess of $500,000 when they ruptured and unmarked natural gas pipeline.\u00a0 The contractor was forced out of business, leaving the property owner with the bill.\u00a0<\/span><\/li>\n
  3. During the night, an unknown party illegally placed drums of hazardous waste into a dumpster behind at an auto dealership.\u00a0 The containers were not leaking, but the cost to properly dispose of the illegally dumped waste cost the auto dealer roughly $50,000.\u00a0<\/span><\/li>\n
  4. The concrete secondary containment of a 10,000-gallon diesel aboveground storage tank was cracked. A release from the tank spilled 8,000 gallons into the containment, 3,000 gallons of which entered the surrounding soils. The total cost of investigation and remediation exceeded $200,000.\u00a0\u00a0<\/span><\/li>\n
  5. An auto dealer was expanding their showroom. During excavation, petroleum hydrocarbon contamination was discovered in the soil.\u00a0 Cleanup costs exceeded $200,000.\u00a0<\/span><\/li>\n
  6. A service garage had a waste hauler that was transporting its used motor oil overturn and spills its load into a nearby stream.\u00a0 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.\u00a0 Cost to settle the claim for the service station was $600,000.<\/span><\/li>\n
  7. During the night, a fire broke out at an auto dealership. As the fire department put out the fire, their high-pressure hoses forced melting plastics, metals, insulation, roofing, drywall, chemicals, oils, and other materials to build up inside the building\u2019s foundation, creating a toxic \u201csludge\u201d. Some of the toxic \u201csludge\u201d escaped the building and migrated onto to neighboring properties. The auto dealer was responsible for all clean-up costs, 3<\/span>rd<\/span> party property damage, 3<\/span>rd<\/span> party business interruption, and natural resource damages, which totaled over $5,000,000.\u00a0 <\/span>NOTE: fire departments are immune to pollution claims arising from their work while putting out fires. <\/span>\u00a0<\/span><\/li>\n
  8. An auto dealership was sued when contamination was discovered in the drinking water at a new residential development. After further investigation, it was determined that the pollutants were not used as part of the auto dealer\u2019s operations, so the auto dealership was not the source of the contamination, releasing them from the lawsuit. However, the auto dealership had already expensed over $75,000 in legal defense fighting the claim.\u00a0<\/span><\/li>\n<\/ol>\n

    Overlooked Benefits of Environmental Liability Insurance<\/strong><\/p>\n

    Unlike most liability exposures impacting auto dealers, pollution losses are not a frequency risk, but rather a severity risk. Because all auto dealers have notable environmental exposures, consideration needs to be given to the economies of scale afforded with environmental liability insurance as part of your risk transfer strategy, versus self-insurance.<\/span><\/p>\n

    Furthermore, most commercial insureds only consider the remediation costs associated with a pollution event. However, often times the clean-up costs are far less than other costs that can arise from the loss.\u00a0<\/span><\/p>\n

    Three Overlooked Benefits<\/b> of Environmental Liability Insurance:<\/span>\u00a0\u00a0<\/b><\/p>\n

      \n
    • Defense Costs<\/b>:<\/b>\u00a0 Environmental liabilities are relatively new and very litigious.\u00a0 Even if you do nothing wrong you can still get named in a suit and have to expense defense costs i.e. legal fees, environmental investigations, etc.\u00a0\u00a0<\/span><\/li>\n<\/ul>\n
        \n
      • \u00a0<\/span>Claim Management<\/b>:<\/b>\u00a0 All policies come with specialists to assist you in handling a claim.\u00a0 Who is in charge of communications, public relations, emergency response, government compliance, financial management, third party claims for bodily injury, property damage, natural resource damages\u2026.?<\/span><\/li>\n<\/ul>\n
          \n
        • Third Party Liability<\/b>:<\/b>\u00a0 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 for bodily injury, property damage and business interruption.\u00a0 You need to look at your client\u2019s and neighbors that can be impacted if you or a sub-contractor\/vendor cause an environmental loss.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<\/span><\/li>\n<\/ul>\n

          Environmental Liability Insurance Products<\/span><\/h3>\n

          Environmental Impairment Liability (EIL)<\/b><\/p>\n

          EIL is for businesses that are susceptible to economic loss caused by pollution that actually or allegedly originated from their operations.\u00a0 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.\u00a0 Coverage can include third party bodily injury and property damage along with business interruption and extra expense, on and off site cleanup costs, legal defense expenses, non-owned disposal sites, transportation and more. EIL can be offered on multi year terms.\u00a0 Most EIL policies cover above ground storage tanks.<\/span><\/p>\n

          Transportation Pollution Liability (TPL)<\/b><\/p>\n

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

          Underground Storage Tanks (UST)<\/b><\/p>\n

          Financial responsibility requirements ensure that owners and operators of underground storage tank systems can 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.<\/span><\/p>\n

          Contractors Pollution Liability (CPL)<\/b><\/h3>\n

          Contractors Pollution Liability (CPL) insurance protects the insured should they cause or exacerbate an environmental condition while performing their contractor services.\u00a0 CPL protects the insured for covered operations performed by or on behalf of the insured, while operating away from any premises they own, rent, lease or occupy.<\/span><\/p>\n

          Auto dealers and service garages have potential indirect environmental exposures from the service vendors & contractors they hire to perform work on their behalf.\u00a0 CPL insurance protects real estate owners \/ developers should their vendors cause or exacerbate an environmental condition.\u00a0<\/span><\/p>\n

           <\/p>\n","protected":false},"excerpt":{"rendered":"

          Claims resulting from a \u201cpollution incident\u201d are excluded from most general liability policies, which leaves commercial insureds with gaps in coverage.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[5],"tags":[382,379,381],"class_list":["post-2636","post","type-post","status-publish","format-standard","hentry","category-risk","tag-auto-dealer","tag-auto-repair","tag-automotive","entry"],"_links":{"self":[{"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/posts\/2636","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/comments?post=2636"}],"version-history":[{"count":2,"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/posts\/2636\/revisions"}],"predecessor-version":[{"id":2638,"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/posts\/2636\/revisions\/2638"}],"wp:attachment":[{"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/media?parent=2636"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/categories?post=2636"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/tags?post=2636"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}