The Problem: To limit its third party exposure, a contractor purchased Remediation Stop Loss Coverage from XL Environmental, which also insured its customer, a company that owned old gas stations. One of the properties had underground storage tanks that were leaking severely and in need of remediation. Gasoline began leaking into the basement of a home near the gas station property. Our insured put together a cost estimate to seal off the homeowner’s basement, monitor the groundwater and get closure from the State.

The Response: The original plan was to use a pump and treat system to remediate groundwater. This plan would have exhausted the project budget and implicated the policy coverage. The contractor, the claimant and the New Jersey Department of Environmental Protection met to discuss a less costly course of action. XL Environmental Claims and the contractor proposed a plan that did not involve treating the groundwater; instead, monitored natural attenuation was the cost-effective alternative. The amount originally proposed for the pump and treat solution was $350,000 and could have reached $750,000.

The Benefit:

• XL Environmental Claims’ environmental and regulatory expertise and swift response controlled remedial costs.
• The contractor and their client pay only the costs they had originally intended.