12/9/15 – by Chris Bunbury, eS – Environmental Risk Managers President:
From contractors to agriculture, manuifacturers, auto dealer and repair facilities, trucking companies, gas stations… Above Ground Storage Tanks (AST’s) are abundant if our business world.
Initial reactions generally are AST’s make sense versus Underground Storage Tanks (UST’s). In talking with insurance professionals I will hear the insured does not really have an environmental exposure because their raw materials are stored in AST’s with secondary containment. The AST pictured above is in secondary containment. However as you and I am sure the contractor at this job site can see the integrity of the secondary containment has been compromised. It is important to annually test the integrity of an AST’s secondary containment.
More than likely if there is a release from this AST it will breach the secondary containment and allow pollutants to spread. As a side note this tank is located in an area where local residents get their potable water from wells on their property, no city water supplied.
I also point out this picture was taken after hours and there was no lock on the tank that would restrict vandals from stealing fuel or just pumping it on the ground for fun. Regardless, the owner of the tank is responsible if there is a release, even if caused by vandals.
At least this tank was placed in some type of secondary containment. I would say more times than not AST’s are just placed on the ground with no secondary containment. Farmers, like contractors will move AST’s around on their property to conserve fuel. We see claims for this after it rains and the ground the AST was placed on gets saturated and unstable allowing the tanks to tip and spill its contents.
Is an AST’s located where natural disasters (tornados, floods, hurricanes, earthquakes…) occur? Natural disasters can destroy the integrity of the tank releasing its contents?
While AST’s seem to be a better option than UST’s, when a spill does occur, the contents can spread faster and further than with a UST release.
Most states do not require financial assurance on AST’s like they do for regulated UST’s. One benefit to financial assurance is when a loss does occur there are some monies available to address the environmental liability. AST’s can easily be insured on a standalone basis or using a contractors pollution liability policy or a site pollution insurance policy.
If you are a AST owner you need to have not only a risk management strategy to reduce your exposure to loss but a financial assurance strategy for when a release occurs.
As you environmental team member Environmental Risk Managers can assist you in proactively addressing your client’s environmental exposure to storage tanks.