Fuel haulers – If they have stopped and are actively transferring fuel and have a spill during the transfer process, does the General Liability or Auto Liability cover the pollution exposure?
If the spill happened before the liquid entered the container it was intended to be delivered in, then this would be an Auto Liability exposure.
The next consideration is: “was there coverage?” It would not be covered unless there was an endorsement added to the policy (ISO CA9948 or similar). The standard ISO Auto Liability forms have a pollution exclusion that excludes direct damage done by “any property” in the possession of the insured unless it is fluids that are needed for operation of the “covered auto”.
Coverage for the clean-up would be addressed under the “covered pollution cost and expense” provision. This provision would not apply unless there is a “pollution buy back” endorsement.
Most providers of insurance haulers of pollutants add a buy back endorsement that addresses a spill of a pollutant, but the agent needs to make sure by reading the policy and endorsements.
The above question leads to another common event while unloading fuels:
The Auto Liability and General Liability policies are designed to work together.
General Liability – “Loading and unloading”
Exclusion g. excludes operation of “autos” owned, operate, loaned, or rented to an “insured” and operation includes “loading or unloading” so “loading and unloading” are not covered
Definition
11. “Loading or unloading” means the handling of property;
a. After it is moved from the place where it is accepted for movement into or onto an aircraft, watercraft or “auto”
b. While it is in or on an aircraft, watercraft or “auto”; or
c. While it is being moved from an aircraft, watercraft or
“auto to the place where it is finally delivered;
but “loading and unloading” does not include the movement of property by means of a mechanical device, other than a hand truck, that is not attached to the aircraft, watercraft or “auto”.
Auto Liability Exclusions
7. Handling Of Property
“Bodily injury” or “property damage” resulting from the handling of property:
a. Before it is moved from the place where it is accepted by the “insured” for movement into or onto the covered “auto”; or
b. After it is moved from the covered “auto” to the place where it is finally delivered by the “insured”.
8. Movement Of property By Mechanical Device
“Bodily injury” or “property damage” resulting from the movement of property by a mechanical device (other than a hand truck) unless the device is attached to the covered “auto”.
Loading and Unloading – Auto Liability or General Liability
Basically, any damage done while items are being loaded and unloaded
Before move starts – GL
When move starts (first touched to start the move) – AL if moving is by hand, hand truck or equipment attached to auto until item being moved reaches its final destination
After final destination, then excluded on the AL and now GL (completed operations is GL)
If move is by mechanical device not attached, then GL (forklift, loader, crane)
There is also an endorsement that most insurance companies add to their policies (CA2305). The wording seems to just restate what the policies already state in their exclusions and “covered pollution cost or expense”.
This insurance does not apply to:
“Bodily injury” or “property damage” resulting from the delivery of any liquid into the wrong receptacle or to the wrong address, or from the delivery of one liquid for another, if the “bodily injury” or “property damage” occurs after delivery has been completed.
Delivery is considered completed even if further service or maintenance work, or correction, repair or replacement is required because of wrong delivery.
Damage and Coverage:
If the insured is delivering gas and while putting the gas in the diesel tank it overflowed, then Auto Liability like above.
If there was diesel already in the tank or the tank was damaged, it would be addressed by the Auto Liability coverage if there is a pollution buy back endorsement. If the wrong delivery was not observed and the mixed fuel was pumped into a truck, the damage to the truck engine and to the pump are addressed by the General Liability.
If at all possible, Auto Liability and General Liability need to be provided by the same insurance company. As explained in the spill, make sure both coverages address pollution damage and clean-up from the property being unloaded are met.
Also check to see if the buy back endorsement is attached to the policy.