For most gas station owners, the largest insurance exposure isn't on the sales floor or at the pumps. It's underground. A leak from a tank, line or dispenser sump can contaminate soil and groundwater for years before anyone notices, and the cleanup bill can exceed the value of the entire property.
Why general liability won't pay
Commercial general liability policies contain a pollution exclusion that removes coverage for most releases of fuel. That's why federal law requires underground storage tank owners and operators to show financial responsibility another way — through a state fund, a private tank pollution policy, or another approved mechanism.
Federal financial responsibility amounts
Under EPA rules, petroleum marketers and facilities that handle more than 10,000 gallons a month generally need $1 million per occurrence, with an annual aggregate of $1 million for up to 100 tanks or $2 million for more than 100. Missouri's Petroleum Storage Tank Insurance Fund offers coverage to eligible owners; Kansas has its own release trust fund, and its eligibility and terms have changed over time. Many owners also buy private policies for broader protection.
What a tank pollution policy covers
- Cleanup of releases on your property and wherever contamination migrates.
- Third-party bodily injury and property damage — a neighbor's basement, a contaminated well.
- Legal defense costs.
- In some policies, transportation pollution and tank closure.
Claims-made details matter
Most tank pollution policies are claims-made with a retroactive date. If you switch carriers without keeping your retroactive date, releases from earlier years may not be covered. Never let the policy lapse.
Compliance is part of coverage
Carriers and state funds expect release detection records, spill and overfill testing, and walkthrough inspections. Poor compliance can jeopardize a claim.
Your tanks are out of sight. Make sure they're never out of mind — or out of coverage.
This material is for general information only. Coverage depends on the actual policy language, and availability varies by carrier.