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Insurers urged to follow new fuel spill guidelines immediately, ahead of July 2011 start date


February 9, 2011   by Canadian Underwriter


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New regulatory guidelines for handling and cleaning fuel spill sites will come into effect in July 2011, but not following the new standards now could put insurers at risk of residual liability.
The new regulations, Soil, Groundwater and Sediment Standards for Use Under Part XV.1 of the Environmental Protection Act, were released in July of 2009, but aren’t mandatory until later this year, according to Eric Zakrewski, president of True Grit Consulting Limited.
However, despite the delay in mandatory adoption, the Ministry of the Environment is advising insurers and adjusters to implement the new criteria immediately, Zakrewski said. He was giving a presentation at the Ontario Insurance Adjusters Association 2011 Professional Development & Claims Conference Seminars in Toronto on Feb. 9.
The ministry recommends following the guidelines immediately, Zakrewski says, because an insurer could face residual liability in a situation in which a site is cleaned up to the old standards, and someone goes in to reassess the property after July 1 and it doesn’t measure up to the new standards.
A situation such as the one above is most likely to come up in a residential property case, when a homeowner puts his or her house on the market.
When there is a spill, it must be reported; this report makes its way into a recorded database for the property. If a homeowner attempts to sell the house, this spill is registered against the title of the property and a potential homeowner might want to have the property re-tested, Zakrewski said.
If the spill was not cleaned to the new standards, the insurer might be facing liability, making it best practice to start following the new regulations immediately.


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