The Problem: A petroleum distributor insured by XL Environmental was placed on notice of a release from a gas station operated by one of its tenants. The release was discovered during excavation activities at a site next door. The distributor faced a costly investigation and cleanup, and increased scrutiny from the environmental authorities.

The Response: XL Environmental Claims assisted the insured in retaining a qualified environmental consultant who prepared an appropriate investigation plan acceptable to the regulators. The investigation revealed that the contamination, although extensive, did not pose a risk to nearby receptors. Therefore a less expensive soil cleanup and risk-based response, which allowed some contamination to remain because it did not pose a risk to others, were permitted by the regulators.

The petroleum distributor’s Pollution and Remediation Legal Liability (PARLL) policy will respond to the costs of the investigation and cleanup, which amounted to $175,000.

The Benefit: XL Environmental Claims’ experience in managing environmental claims enabled it to choose an appropriate environmental consultant who was trusted by the regulators, and who did not try to take advantage of the situation and recommend an extensive cleanup. The resulting quick response to the claim avoided unnecessary cleanup costs as well as fines and penalties.