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A Volatile Climate

The methods employed to handle environmental cases continue to progress.

By Ted M. Cleveland, John E. Cook | Updated on August 29, 2011
The tiny pinhole in the pipe elbow probably took more than 20 years to form and cause a leak, a day or two to be discovered, and less than an hour to be repaired. This recent claim involving the corrosion of a pipe elbow on a home heating oil tank resulted in the minor release of a few gallons of heating oil into the surrounding surface soil. The insured acted appropriately, and the release was quickly investigated and repaired. Based on the size of the tank and the volume of the release, state regulations did not apply; however, local regulators quickly became concerned about the potential impact to shallow groundwater in the area.

Although the shallow aquifer was not considered a source of drinking water, it was used extensively for irrigation purposes. Furthermore, the property owner soon noticed petroleum-like odors inside the home and office, necessitating relocation for a couple of days. A few weeks after the repair of the leak, the situation was completely resolved with the excavation and removal of impacted soil from beneath a patio and a portion of the building adjoining the point of release. Fortunately, specialists were able to not only discover but also remedy the release quickly. Moreover, the volume of the spill was not sufficient to impact groundwater, which could have easily transported contaminants and associated vapors well beyond the boundaries of the insured’s property.

This type of loss is a fairly typical example of a residential environmental claim. Years ago, this claim may have been settled simply as a mechanical issue, with much less focus on the longer-term environmental considerations, regulatory impact, and vapor intrusion into the home. Recently, the complicating factors to these claims have been growing. Therefore, the methods employed to handle environmental cases continue to progress. By the nature of this type of work, environmental issues frequently evolve because of the regulatory climate, technological advances, litigation, and cost considerations.

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