Superstorm Sandy's recent strike hit the most densely populated area of the country, causing loss of life, destruction and dislocation on a massive scale. Recovery efforts are still in their infancy, and the storm's economic impact will be felt by businesses and individuals across the country for some time. Many businesses have suffered direct damage to property and lost income due to the resulting interruption of their operations, while others may face environmental-contamination claims stemming from Sandy. For those businesses facing potential liability from environmental-contamination claims, liability insurance may be an important asset to help offset defense costs and remediation payments.

The government is seriously assessing potential environmental threats in Sandy's aftermath. The U.S. Coast Guard, Environmental Protection Agency, National Oceanic and Atmospheric Administration, oil-spill removal organizations, New York Department of Environmental Conservation and New Jersey Department of Environmental Protection have joined efforts to create a Hurricane Sandy Pollution Response Unified Command. The unified command has created branches, divisions and task forces, totaling 137 personnel, to assess and respond to impacted areas. The unified command is currently identifying environmentally sensitive areas for pollution and hazardous materials.

Early reports have identified several environmental incidents, including: 277,000 gallons of diesel fuel spilled from storage tanks damaged by Sandy at the Sewaren Terminal along the Arthur Kill River in New Jersey; another 7,700 gallons of fuel spilled from a refinery in Linden, N.J.; and approximately 238 barrels (some 10,000 gallons) of biodiesel spilled from a Carteret, N.J. terminal after Sandy devastated the East Coast. We expect additional environmental scrutiny surrounding the New York area concerning parking garages in which hundreds of vehicles were trapped for days and even weeks; marinas along the East Coast where many vessels sank; and, potentially, the maze of pipelines supplying fuel to the Northeast.