Insurance Coverage for Release of Hazardous Waste

Posted in on March 13, 2014

Residential property owners that use oil to heat their homes should be aware of the new protection afforded by the amendment to M.G.L. c. 175, §4D.

Many people are under the misconception that a leak in their heating oil storage tank that allows oil to migrate into the ground would be covered by their home owners insurance policy. However, until such an event occurs, most homeowners are unaware that clean up costs and damages caused by such an event are excluded from coverage. Most policies only cover for clean up to an adjacent parcel should a release eventually migrate onto that adjacent property.

Effective for homeowner policies issued after January 1, 2009, insurers shall make available coverage for costs incurred in response to a release of oil from a storage tank, piping, supply lines or equipment connected thereto. The additional premium charged for the coverage cannot be excessive. It should be noted that the insurer can require proof that the storage tank, piping and supply lines meet certain the regulatory standards set forth in the amended M.G.L. c.148, §38J or be upgraded prior to providing the coverage.

Homeowners would be wise to consider that a reasonable premium paid as part of a homeowner’s insurance policy can avoid significant legal fees and clean up costs should there be an oil release.