Risk Alert - Environmental exposure as oil storage increases | Towergate Insurance Brokers

8/5/2020 12:00:00 AM

Risk Alert - Environmental exposure as oil storage increases

Coronavirus is impacting our lives in many ways and changing our routines. It has also caused the price of oil to fall meaning that both people and organisations alike may be storing more oil than usual, especially during the summer.

The Environment Agency is urging people to check oil tanks are in a good state of repair due to the increased risk of leaks and the danger this poses to the environment and wildlife.

Leaks and spills from a domestic heating tank can be difficult and expensive to clean up; leaked oil can end up in groundwater supplies and drains, many of which lead directly into rivers, streams, lakes and even garden ponds, as well as supplying vital drinking water.

If oil does get into drains it could pollute watercourses; harming livestock, wildlife and plants. Oil is poisonous to wildlife and smothers plants - just two litres of oil could seriously pollute the volume of fresh water needed to fill an Olympic-size swimming pool.

Helen Wakeham, Deputy Director of Water Quality for the Environment Agency said, “With people storing more oil than normal over the summer months, the risk of leaks is ever greater, and the danger these pose to the environment and wildlife must not be underestimated. The clean-up costs of a leaking tank can also cost tens of thousands of pounds, and land contamination caused by a leak can severely affect the value of your property. It is vital both the tank and pipes are regularly inspected and for people to never buy more oil than they can safely store. If anyone does find a spill, please contact us straight away so we can reduce the impact on the environment.”

Pollution can have significant financial consequences, even if accidental. The Environmental Liability Directive (ELD) became law in the UK on 1st March 2009 as the Environmental Damage Regulations (EDR). The directive is comprised of two new liability criteria, not usually covered in the UK by a typical business insurance policy, namely;

Strict liability for specified environmentally hazardous activities
Fault-based liability for all other business activities

New liabilities beyond clean-up could spell the end of many businesses in the event of an uninsured loss. The good news is that in addition to risk management to prevent losses, it is easily insurable and with straightforward underwriting, flexible products and competitive pricing, there is no reason to risk having an uninsured environmental loss.

To report an oil spill people should contact the Environment Agency’s 24-hour incident hotline on 0800 807 060. You can also visit Gov.uk for guidance on the regulations that apply to storing oil and the Oil Care Campaign website for further guidance.

Source: https://www.gov.uk/government/news/checkyour-heating-oil-tank

Business insurance from Towergate

At Towergate we don’t just offer traditional insurance broking: we believe that prevention is better than cure. That is why we have our own risk management consultancy focusing on pre-loss mitigation and business continuity, and have developed our own business interruption calculator.

We engage actively with insurers and our clients to obtain protection for businesses of all sizes. Our wide range of covers help protect your organisation should the worst happen.

See our range of specialist business insurance or contact your local office.

We are passionate about tackling the unprecedented levels of underinsurance in the UK: watch our video on how to avoid this for your business.

About the author

Mark Brannon Cert CII is a respected industry leader with over 17 years’ industry experience in a variety of roles within the business insurance sector. He works across a wide spectrum of insurance product and policy development, delivery and optimisation for clients, including claims, insurer relationships, marketing and communications, and risk management.