There are approximately 575,000 underground storage tanks in the U.S. While underground storage reduces fire risks for tank contents, it also increases pollution exposure. Philadelphia Insurance responds with a program for storage tank risks.
PRODUCT: Storage Tank Environmental Policy (STEP)
COMPANY: Philadelphia Insurance Companies
BEST RATING: A++ (Superior)
AVAILABILITY: Coverage is available to U.S. independent agents and brokers through UCPM Inc., a specialty wholesale broker for environmental insurance that acts as managing general agent.
FOCUS: Jon Peeples, vice president of environmental underwriting, environmental division of Philadelphia Insurance, estimates there are approximately 575,000 underground storage tanks in the U.S. which are used for service stations and other commercial, retail and industrial purposes to store hazardous liquids. While underground storage reduces fire risks for tank contents, it also increases the pollution exposure these businesses face, Peeples explains.
Philadelphia, which offers niche commercial lines products, now offers a program for storage tank risks. The policy is designed to meet owners’ and operators’ financial responsibility for tanks under federal regulations. It covers corrective action and compensation of third parties for bodily injury and property damage caused by accidental releases from tanks used to store fuels, chemicals and other regulated materials.
Philadelphia, which has offered environmental coverage since 2009—including coverage for environmental risks for contractors and consultants—offers the tank program on a non-admitted basis. The carrier wants to help small to midsize agencies “access and handle a tank submission themselves”—without relying on a wholesale broker as has been typical, Peeples says. The program aims to give agents the ability to submit and bind in just 10-15 minutes, while “trying to make it accessible, easy to use, quick and efficient” for the agent, he adds.
UNDERWRITING: The product offers liability coverage to protect policyholders from claims for bodily injury, property damage, remediation expenses and associated defense expenses arising from release of contamination from above-ground or underground storage tanks. Limits are up to $1 million per occurrence and $2 million aggregate. Defense costs are separate and typically offer coverage up to 25% of limits. Deductibles are available up to $25,000.
Agents can access the coverage via an online web portal, which can issue policies and provide financial assurance certificates to demonstrate Environmental Protection Agency (EPA) or state financial assurance requirements. The online application process requires information about tank address, size, installation date, construction, contents, overfill protection, piping and monitoring systems.
MINIMUM PREMIUM: $300 per tank.
TARGET: Eligible classes include underground or above-ground storage tanks for which owners or operators must demonstrate they meet EPA or state financial assurance requirements. Typically, tanks are located at service stations, maintenance shops, hospitals, universities and other industrial, commercial and retail operations.
Ineligible risks include heating oil tanks, septic tanks, residential tanks, inoperative tanks, portable tanks and tanks older than 40 years.
COVERAGE TERRITORY: Washington, D.C. and all U.S. states except Louisiana.
CONTACT: Janice Nunziata, product manager, environmental division; Tokio Marine Specialty, 1 Bala Plaza, Suite 100, Bala Cynwyd, PA 19004; 610-227-1459.
Ronimarie Acord is an IA contributor.
