There are over 500,000 underground storage tanks in the US that store hazardous substances. Most are used for commercial purposes by livestock farms, gas stations, or hotels.
These tanks have the potential to seep into groundwater, which is the drinking source for half of all Americans. The health consequences of both above-ground and underground storage tanks leaking can cause dire consequences to the environment and human health.
If you own farm, a gasoline station, or any other business needing a storage tank, storage tank liability insurance is a crucial tool to ensure you are protected from the costs and liabilities of any release. This insurance also plays a vital role in incentivizing safety standards and helping clean any unfortunate cleanups.
This article will explain all the basics you need to know about storage tank liability insurance, including:
Why you need storage tank liability insurance
What perils are covered
Who the policy is for
The cost of coverage
Best companies for storage tank liability insurance
If you are a business owner who is installing a storage tank, you will want to be familiar with the legal requirements that different states have regarding coverage. A few examples include the following:
Alaska: Alaska requires a form of financial backing to cover expenses due to cleanup or leaking underground storage tanks (UST). Tank owners are required to show proof of financial responsibility to the government annually. You need $1 million per occurrence coverage and $2 million aggregate coverage.
Indiana: In Indiana, the Department of Environmental Management requires that an owner or operator of a UST must provide $1 million in financial assurance. This number increases to $2 million for owners with more than 100 USTs
Montana: Owners of USTs in Montana must have some form of financial responsibility to cover clean-ups and third-party damages. Non-marketers with less than 10,000 gallons per month only need $500,000 of coverage, while standard owners will need between $1 million and $2 million in protection.
Kansas: Kansas has the Storage Tank Act, which creates two trust funds to cover petroleum aboveground and underground storage tanks. These trust funds are funded by a $0.01 fee on all petroleum in the state.
Iowa: The Iowa Department of Natural Resources requires a certificate of insurance to demonstrate the financial responsibility requirement. Iowa requires per-occurrence coverage and aggregate coverage between $500,000 and $2 million.
The EPA requires that all UST owners pay for the cleaning and compensation costs of any leak incident. To best comply with this financial requirement, storage tank liability insurance. In the next section, we will explain what storage tank liability insurance is.
Storage tanks will last between 20-30 years on average, depending on the material used to make them and how solid their construction is. Plastic storage tanks, like water tanks, will last 20 years, while metal tanks can last over 30 years.
Generally, storage tank liability insurance covers a few different types of perils or incidents, including:
First and Third-party bodily injury from pollution incidents
First and Third-party property damage from pollution incidents
Cleanup costs at the tank operator's facility
Different policies will vary, but the coverage limit generally covers up to $5 million in coverage. Generally, the legal and financial requirement is $1 million per occurrence coverage as well as aggregate coverage.
A few different kinds of businesses will typically have a need for storage tank liability insurance.
| Farms | Livestock farms will often need storage tank pollution insurance to cover any pollution incidents from farm chemicals they are storing. |
|---|---|
| Breweries | Breweries will typically store their product in large storage tanks. A storage tank pollution liability insurance policy ensures they are covered for any spills or storage tank leaks. |
| Gas Stations | Gas stations must store petroleum in underground storage tanks to service customers. Underground storage tank liability insurance is essential to ensure that the business is able to handle the costs of spills, injury, and property. |
| Schools | Schools sometimes use water tanks to harvest clean drinking water for the community. These water tanks are typically stored above ground. Some schools also use storage tanks to store diesel gasoline for a school bus fleet. |
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Besides getting financial responsibility through storage tank liability insurance, there exist other requirements that people must follow when installing a storage tank. Additional requirements are set by government agencies like the Occupational Safety and Health Administration (OSHA).
OSHA requirements regulate the health and safety conditions of workplaces. Some OSHA requirements that you will need to follow include:
Storage containers cannot exceed 1,100 gallons in any pile or area
12-foot wide access is permitted to approach fire control apparatuses
Any storage area needs to be graded to divert possible spills away from buildings and accumulations of rainwater
Storage areas are required to be free of weeds, debris, and combustible material
Portable tanks cannot exceed 660 gallons
One portable fire extinguisher required not more than 10 feet from any flammable liquid storage units
The SPCC is the spill, prevention, control, and countermeasure rule put forth by the EPA that regulates storage tank facilities so that they are not hazardous to the area they are in. Some of these requirements include the following:
All aboveground bulk storage tanks need to undergo integrity testing
Keep track of whenever you make material repairs
Submit to visual inspections designed to detect hidden leaks or spills
Tanks must be taken out of service for several hours during an integrity test
Storage tank liability insurance can cost as low as $29 per month with the right conditions on your policy. Below is a price breakdown of different policies that popular companies sell:
| Cost per Month | Cost per Year | Best For | |
|---|---|---|---|
| Chubb | $29 | $348 | Starting price |
| Liberty Mutual | $41 | $492 | Add-ons |
| American Insurance | $60 | $720 | Expertise |
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The best storage tank liability companies can be found below. Take a look at the advantages they offer over one another. Read some of the reviews below to know their pros, cons, and rate for a storage tank liability policy.
Expertise in the area
Addons for transportation and waste disposal
Mobile app
Only available for Utah businesses
American Insurance is a longstanding insurance company founded in the 1950s. They earned have earned the Assurex Global E&O in Utah award each year since 2005. The company boasts a 94% commercial client retention.
Their storage tank liability insurance has various limit options, up to $5 million in coverage for third-party liability and property damage. They also include costs for corrective action and cleanup efforts that a government agency requires.
Best for: Expertise
Average cost: $60 per month
Our rating: 10/10
Expertise in the Area
Addons for transportation and waste disposal
Mobile app
Not every state has a physical office
Liberty Mutual has an A (Excellent) rating from AM Best for its financial strength. They offer increased control of your claims thanks to the expertise of their environmental risks team. This allows you to resolve any potential pollution risks quickly and resolve your claims.
Their policy covers discovery correction action, clean-up costs, as well as bodily injury and property. They also have optional transportation and waste disposal add-ons that can save you on time and money.
Best for: Addons
Average Cost: $41 per month
Our rating: 10/10
Online application process
Instant policy certificate
Fewer coverage options
Chubb has one of the lowest $350 minimum storage tank liability policies. The company reported $52 billion in gross written premiums in 2022 and has an A++ from AM Best. They have been offering storage tank insurance for over 15 years.
The Chubb policy is called Tanksafe, and it does what it says, keeping your storage tank safe and covering injury and property liabilities. Policy limits start at $500,000 but go up to $5 million. They are restricted from covering any underground storage tanks that were installed more than 30 years ago due to their web-based process system.
Best for: Starting price
Average Cost: $29/mo
Our rating: 10/10
Use anyone except Employers. Period. They are non-transparent and shameful. After I complained long enough to warrant a call from a supervisor, the supervisor called back from a PRIVATE NUMBER (no caller ID), left a message that they are not reversing their decision (without any communication with me), and failed to leave a phone number for me to call back. She was hiding! They also fact find via email and phone calls, which is terrific for speed and communication. However, after setting a precedence of email or phone calls, they send time sensitive information via email, without any heads up... they are hoping you miss it and forfeit via expiration. Evil policies. Go elsewhere.
This place is an absolute joke of a company and should be ashamed of the way they conduct business. I was hurt on the job at the end of July and it took them just shy of 7 weeks to issue out a paycheck to me. Yes the amount was back dated but still. Not many have the luxury of not receiving a paycheck for almost 2 months. To top it all off, the original adjuster marked me down for the wrong state which caused a problem from the get go, I've had 3 different adjusters now since each one can't seem to figure out the simplicity of my claim. All my paperwork which includes, my job, house, and drs visits all are from the same state and city but yet some how I have been filed under a completely different state 1500 miles away. They do not answer your phone calls or emails no matter how many you leave. I've had to escalate my frustrations to the supervisors of each of these individuals in order to even get some kind of response. I've had more communication and information given to me about my claim from the customer service representatives then the actual adjusters.......... please tell me how that works?! A serious overhaul needs to happen here in order to serve your clients the way they deserve to be taken care of. 10/10 do not recommend this company to a single soul on earth
I have never had the displeasure of working with a more incompetent and disrespectful person in my life. I’m an injured worker and the adjuster that was assigned to my case was named Carrie Furgeson. In the past 6 weeks that I’ve been injured and out of work I have only been able to get ahold of her twice, not for lack of trying. I have left countless voicemails, countless emails, and she ignores them all. When I am finally able to get ahold of her I’m greeted with terrible customer service. She is rude, she talks over me and I’m hardly able to get a word in edgewise. She spelled my name wrong on my documents even after I spelled it for her properly countless times, this caused a whole new issue with my bank. I have bill collectors from the hospital calling me demanding payment and Carrie Furgeson won’t do a single thing to help, or to get them paid. All of my documentation is in Colorado, my job is in Colorado, my address is in Colorado, all my Dr offices and appointments have been in Colorado and Carrie still managed to hold my claim because she wasn’t sure what state she needed to file it under. It’s been 6 weeks since my Injury and my company still hasn’t received the wage paperwork to fill out so they can get me my correct wages. When she’s not ignoring me she’s answering my questions with “I don’t know” well I don’t know how she got this job, because apparently she doesn’t know anything about it. She is a disgusting morose individual inside and out and I genuinely wish her the worst in all of her future endeavors. I highly recommend you don’t use this company. Please if you are a business owner and your looking into this company please don’t use them. I’m sure they have the cheapest payment and that’s why companies use them in the first place, but you will be doing your employees a grave disservice by forcing them to venture into this absolute dumpster fire of a company. I would rate 0/5 if possible but 1 was the lowest I was allowed.
Their general liability insurance purchase process is simply the best online experience I've ever had in my life!
As long as they cover your line of business, you're literally covered! best rates, best coverage, best online experience, best professionals, can't be happier that I chose them!
Not all those who wander are lost.
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