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Q: I recently purchased land with an aging oil storage tank on it. What liability do I have if it is leaking?

A: Strict compliance with all applicable environmental laws is required of owners of typical 250-gallon home heating oil storage tanks, or any larger above or below ground storage tanks. Oil leaking from such tanks, whether you are aware of it or not, will result in significant liability, expensive remediation costs and possible fines or civil penalties. Depending on the size of the tank(s), additional requirements for having a Spill Prevention, Control, and Countermeasure plan will also apply.

It is good practice by owners of oil storage tanks to have the tanks routinely inspected by a qualified consultant. An inspection that identifies non-compliance, or the risk of a pollution event, will allow the owner to take corrective action to avoid future liability and costs. The State SafeTank program, administered by the N.H. Department of Environmental Services (“DES”) provides financial assistance to qualified parties to upgrade, replace, or remove deficient heating oil tanks.

Owners should also review their insurance policies to determine the coverage they would have, or should purchase, to cover a release. The most commonly purchased policies may not provide coverage for such events in which case you may consider purchasing such additional insurance coverage. If a release has occurred, existing policies should be evaluated by competent counsel to determine whether coverage is available on a case-by-case basis.

If an oil release occurs, State law requires immediate notice to the DES of any release that exceeds 25 gallons and, if less than 25 gallons, is not contained and immediately cleaned up. Failure to immediately notify DES may foreclose eligibility for cost reimbursement by the State Petroleum Reimbursement Fund (“Fund”), and may result in State enforcement, fines and penalties. Depending on the quantity and location of a release, federal law also requires notice and imposes significant fines for non-compliance.

When there is a release, owners should promptly notify their insurance carriers. If there is no, or insufficient, insurance coverage, owners may apply to the Fund, which is deemed to be “excess insurance” coverage over and above any available primary insurance for the costs to remediate the release and certain third party damages caused by the contamination.

Compliance with these and related environmental laws can be better understood and met with the assistance of qualified environmental consultants and experienced environmental legal counsel.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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