Canadian Underwriter

Environmental Losses Related to Transportation Claims

February 10, 2017   by Joel van Popta, Senior Associate, -30- Forensic Engineering.

Print this page Share

In the context of motor vehicle claims, auto claims make up a significantly larger portion of total claims than trucking claims; however, the potential damages and quantum of a trucking claim far exceed that of a typical auto claim. Trucking incidents typically present greater potential for vehicle damage, personal injury, and collateral damage.

This collateral damage can include cargo damage or loss, damage to roadway infrastructure or environmental impairment associated with the loss of motive fuel, lubricants or other fluids, including hazardous cargo. Not all trucking collisions result in environmental impairments, but when they do, the costs to remedy the impairment or restore the natural environment can be significant. The quantum of damages associated with environmental impairment can be orders of magnitude larger than other aspects of a claim.

Joel van Popta, Senior Associate, -30- Forensic Engineering.

Contaminant impacts and environmental impairments can be associated with motive fuel from the vehicle saddle tanks, motor oil or lubricants, coolant or brake fluids and even the cargo itself. In some situations, products that may not typically be considered pollutants (e.g sawdust, salad dressing, or molasses) become pollutants when released into the environment. In Ontario, for example, Part X of the Ontario Environmental Protection Act, R.S.O. 1990, Chapter E.19 (EPA) defines ‘pollutant’ as any solid, liquid, gas, odour, or combination thereof, resulting directly or indirectly from human activities that causes or may cause an adverse effect. Certain exemptions apply and are outlined in Ontario Regulation 675/98 Classification and Exemption of Spills and Reporting of Discharges.

However, if there is a release to a surface water body or if the release has the potential to adversely affect groundwater, regardless of the volume spilled, the exemptions do not apply. The spill must be reported to the appropriate jurisdictional bodies and the adverse effects of the spill must be addressed, consistent with the polluter’s obligations to mitigate the adverse effects and restore the natural environment as stipulated under Part X of the EPA.

A carrier transporting hazardous material would be trained in response procedures and have specific emergency plans in place to respond to an incident involving the release of hazardous material to the environment. Remediation of the adverse effects of the loss and restoration of the natural environment would be required. The same requirements apply in cases where the cargo itself is not considered a potential contaminant. As mentioned, a seemingly safe product can significantly impair the natural environment. Whether the loss is associated with diesel, kerosene, or milk, remediation would be required to restore the natural environment.

In addition to environmental impact from motive fuel or cargo loss, trucking collisions can cause collateral damage to infrastructure and lead to environmental impairment. A collision could destroy a retaining wall, leading to erosion of a stream bank, which in turn causes a release of sediment to the stream, changing the quality of surface water and affecting a fish habitat.

Environmental impairments may result from other circumstances unrelated to a spilled material. In the assessment of damage there are advantages to using a multidisciplinary approach; having an eye for the potential damage (environmental, roadway infrastructure, among others) is key in coordinating an appropriate response. Also, the variety of factors that lead to a loss require a perspective that considers road design, road maintenance, mechanical failure, and human factors, among other influences.

Coordinating a timely response is fundamental to mitigating the extent of environmental damage resulting from a release to the natural environment. A prompt response can often reduce the extent of impact from a release. While the migration of fuel to the environment is dependent on specific surface, soil and groundwater conditions, the longer the pollutant persists in the environment, the farther it can and will migrate. Having said that, the early response should be appropriate to the circumstances.

A fundamental factor in mitigating costs associated with environmental cleanups is to delineate the emergency response stage from the project remediation stage. The emergency, or early response stage is intended to mitigate damage and environmental impairment by removing accessible impacts to near surface soil or surface water. Depending on the size of the loss, the early hours or days of the response will be focused on mitigating environmental impairment. Often, special rates and premiums will apply. Depending on the size of the loss, the emergency response phase could be completed in the first few hours or days after the spill occurs. In other cases, 24-hour monitoring is required for some time after the loss. In either case, it is prudent to push the project out of the emergency response stage as quickly as practicable.

In the context of mitigating remediation costs for the insured, a prudent approach would consider the assessment of background conditions in the vicinity of the loss to evaluate the potential for pre-existing impacts, unrelated to the current loss. An evaluation of ‘pre-loss’ soil or surface water quality may identify impacts to certain media associated with an historical release, which was not remediated. Also, in an urban environment, baseline or background petroleum hydrocarbon and heavy metal impacts to roadway drainage ditches from runoff are not unexpected. Assessing background conditions helps to focus the remediation on the subject loss and mitigates the potential for remediating unrelated impacts. Restoring the natural environment to the ‘pre-loss’ condition can be challenging enough without the burden and cost of remediating unrelated impacts to soil or surface water.

In summary, taking a comprehensive and proactive approach to assessing and mitigating a loss, evaluating possible existing impairments in the context of the subject loss, and transitioning a project out of emergency response, are key factors in reducing the exposure resulting from an environmental loss associated with a trucking claim. Certain principles of emergency management and remediation are foundational to an appropriate and prudent response to environmental losses, however, the application of these principles will be specific to the site conditions. Each event will present a unique set of challenges. A successful resolution will be dependent upon an appropriate application of sound response and remediation procedures.


Joel van Popta, M.Sc., P.Geo. is a Senior Associate serving the Environment discipline at -30- Forensic Engineering.