The Problem: A general contractor handling a major commercial building project in Florida subcontracted an underground storage tank (UST) contractor insured by XL Environmental to remove a UST and install an aboveground storage tank (AST). After successfully completing the job, it turned out that the XL Environmental insured had failed to obtain the required permits. When the general contractor was fined due to the lack of proper permitting, they in turn filed suit against the UST contractor to collect the fines.

The Response: XL Environmental conducted a thorough investigation of the claim, finding out in depositions that the general contractor (the claimant) had coerced the UST contractor into performing the job without the necessary permits in order to meet a tight building deadline. While the UST contractor will maintain some liability for its actions, it will be mitigated because of the coercion at the hands of the claimant.

The insured's Contractor’s Pollution Legal Liability (CPL) policy responded to pay for the expenses associated with the fine.

The Benefits: XL Environmental's expertise in obtaining depositions and analyzing the insured’s documentation supporting the general contractor’s coercion was instrumental in diminishing the client’s liability. Without a full and thorough investigation of the claim, the client would have borne significantly greater expense to resolve the claim.