A 10-year regulation in Florida, requiring businesses withunderground tanks storing hazardous materials to replace them bythe end of this year, is the driver behind a new storage tanksystem and an innovative new insurance policy for those tanks.

|

Because of Florida's proximity to the ocean and high groundwaterlevels, the issue has important environmental connotations.

|

“When you've got fuel in underground storage tank situations,the prominent risk is the release of product into the environmentthat causes a pollution event,” said Ronald Bachmeier, chiefoperating officer of ZCL Composites in Edmonton, Canada.

|

Potentially thousands of Florida service station and conveniencestore owners who have not yet upgraded their existing single-wallfuel storage tanks to secondary containment may be forced to ceaseoperations.

|

In addition, those who have not completed this required upgradeby the end of the year are experiencing cancellation or nonrenewalsof their liability insurance policies. For many station owners,these liability insurance policies are required for them to meetfederal and state Financial Responsibility requirements, andtherefore to remain in business.

|

But a joint initiative of ZCL Composites Inc., the largestunderground fiberglass tank manufacturer in North America, andFreberg Environmental Insurance, a Denver, Colo.-based programmanager, could remedy those problems. Together they developedPrezerver, a comprehensive, noncancellable, 10-year undergroundstorage tank insurance policy for ZCL's U.S. customers.

|

For U.S. customers, the one-time premium feature of thePreserver insurance policy eliminates annual renewals, therebyavoiding the likelihood of premium rate increases as tanks age. Thepolicy also is transferable to a new site owner, and lenders can beadded as additional insureds.

|

Prezerver is underwritten in the United States by EnduranceAmerican Specialty Insurance Co., rated “A” by rating agency A.M.Best Co. The coverage was arranged by Willis HRH through FrebergEnvironmental Insurance.

|

Freberg Environmental Insurance, an insurance program managerthat specializes in developing, marketing and underwritingenvironmental insurance programs, is part of the Willis Programsunit of Willis HRH, the North American retail business of WillisGroup Holdings.

|

The U.S. coverage offered under Prezerver provides manyadvantages over alternative financial assurance mechanisms. Unlikemost state funds, Prezerver also provides coverage for equipmentrepair and replacement costs. Further, the policy pays on theowner's behalf as cleanup expenses are incurred, while state fundstypically reimburse only after remediation and repair costs havebeen paid by the site owner.

|

In addition to the Prezerver insurance policy, ZCL and Xerxes,ZCL's U.S. subsidiary, provide a manufacturer's warranty of up to30 years against corrosion on its underground fiberglass tanks,provided the products are installed and used solely for storage oflisted liquids.

|

The Prezerver policy is available to owners of ZCL undergroundstorage tanks anywhere in the United States, but the policyparticularly helps those gas station owners dealing with thepotential insurance crisis in Florida.

|

Mr. Bachmeier said that coverage for underground tanks hasevolved over the last 20-30 years in response to the needs of “bothus as a manufacturer and to our customer's needs for pollution andliability insurance.” He said that 30 years ago there were limitedproducts available for pollution liability.

|

“What we've been able to do is find and form relationships withpeople who are interested, not only in meeting our needs as amanufacturer but also in meeting the needs of our customers,” hesaid.

|

The new product, he said, is a package of pollution liabilityinsurance being sold with the equipment package to customers. Henoted that the company, which is not in the business of sellinginsurance, has partnered with Willis HRH, which located theinsurance product.

|

The Prezerver insurance solution follows ZCL's introduction intothe U.S. market last year of its Prezerver double-wall storagetanks. The tanks are manufactured with Parabeam, ZCL's patented,three-dimensional glass fiber material. The unique design of thedouble-wall storage tanks allows the tanks to be continuouslymonitored, using a brine-filled interstice.

|

ZCL introduced the double-wall fiberglass tanks in Canada in1989 and created the Prezerver insurance policy in Canada in 1996.So far, there has never been a substantiated claim against thePrezerver policy in Canada, the company said.

Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader

  • All PropertyCasualty360.com news coverage, best practices, and in-depth analysis.
  • Educational webcasts, resources from industry leaders, and informative newsletters.
  • Other award-winning websites including BenefitsPRO.com and ThinkAdvisor.com.
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.