Do You Drop at a Third-Party Waste Facility?

Many of the members of our association drop their loads at a third-party waste facility. It could be owned and operated by the local municipality or it might be privately run. Regardless of who runs it, there are very strict environmental rules and regulations that the facility must adhere to and if those strict guidelines are breached, the costs associated with correcting the issues can be enormous. But why should you care? Your crew simply dumps loads at the site and you follow all of their requirements. Well, sometimes even the most competent crew makes mistakes and if that mistake accidently contaminates a waste facility, your insurance policy may deny the claim.

Here’s a real life claims example; a few years ago, a contractor unloaded his tank at such an Ontario facility. The unloading was uneventful and the site operator took a small sample of the load as it dropped into the tank. The next day, the contractor got a call from the facility – the sample had registered “hot”. Something had contaminated the load (it appeared to be oil) but how it got there, no one knows. Ultimately, the facility was forced to shut down that tank, empty it, scrub it and test it to ensure there were no traces of oil. And who do you think they sent the bill to? That’s right, the contractor – including a demand for restitution of lost revenue suffered by the site due to the shut-down. The M.O.E. also charged and fined the contractor for transporting and discharging a hazardous load in a facility not designed to handle it. So, did the contractor’s pollution insurance policy pay for all of those costs?

In order to have coverage in this scenario, the pollution policy would need to include a number of special clauses. Frankly, many insurers do not offer some of these clauses and often even the insurance broker is unaware that they are missing or needed. For example, the policy needs to include coverage for third-party facilities. Many policies state that they will not cover losses at waste facilities. They exclude this coverage because these types of losses can be very expensive to deal with. So, it is left up to the insurance broker to either negotiate that coverage back in or find a different insurance company that welcomes coverage at third-party waste facilities.

Coverage for third-party waste facilities is only one of about a dozen special coverages I look for when I shop for pollution insurance policies for my clients. It’s a coverage that you very likely need, too.

Lorne Wiebe is a Commercial Insurance Account Executive with Rhodes & Williams Ltd, an independent family-run insurance brokerage for over 75 years with offices in Ottawa and Toronto.

 Lorne is a proud member of the Ontario Association of Sewage Industry Services (O.A.S.I.S.).

 Presented here is a general article about insurance. The discussion is general in nature, and does not constitute insurance advice. This is not intended to be a description of coverage, and does not include details of the coverage nor the terms, conditions, qualifications, limitations and exclusions applicable. Policies should be reviewed in their entirety and related to your specific operations. Many insurers permit changes (Changes to insurance policies are usually called “endorsements” or “riders”) in their limitations or exclusions to match your specific requirements. As insurance advice must be tailored to the specific circumstances of each situation, nothing provided herein should be used as a substitute for the advice of a competent insurance broker. IN NO EVENT WILL RHODES & WILLIAMS LIMITED BE LIABLE FOR ANY DAMAGES WHATSOEVER, INCLUDING SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES, ARISING OUT OF OR IN CONNECTION WITH THE USE OR PERFORMANCE OF THE INFORMATION PRESENTED IN THIS DOCUMENT.