Fire Department Clean Up Expenses and the PAP

April 1, 2013

It is my understanding that the expenses incurred by a fire department to clean up hazardous substances in the roadway, caused by an auto accident should be covered under the personal auto policy. However, we are reviewing a complaint where the carrier is stating that the town that had its fire department perform the clean up did not sustain bodily injury or property damage and so, the insurer is denying the claim.

I would greatly appreciate your insight.

Vermont Subscriber

The only way that a clean up expense would be paid under the PAP is if the insurer considers that to be property damage as defined. Some insurers may go along with this and others may not. We are of the opinion that clean up expenses in and of themselves may not fit the definition of property damage, although much depends on the facts of the particular incident. For example, if the hazardous substance leak actually causes the roadway to buckle and become unusable to the point that it has to be repaired, we see that as property damage as defined, and the repair and the clean up as part of the repair would be covered. But if a spill just requires a clean up and there is no actual physical damage, that is not property damage as defined. So, you have to see exactly what the circumstances are before deciding to cover or not cover a claim.