Heating Oil Underground Storage Tanks (USTs) in the Basement of a Multi-Family Residential Tower

Source: SiriusPoint Environmental

A lending institution wanted to offer a loan to refinance a 45-story multi-family residential tower in New York. The boilers in the basement had historically been fueled by heating oil that was stored on-site in several large USTs buried beneath the basement floor. The USTs were no longer in use and had been abandoned in place decades ago, but there had been no investigation or sampling of the USTs. Concerned about a potential release of petroleum hydrocarbons from the USTs, the lender was hesitant to extend financing on the property. Based upon the  profitability of the collateral and the financial strength of the borrower and guarantor, SiriusPoint offered unrestricted site coverage for the lender. In the event the borrower was to default on the loan, the lender would have environmental insurance coverage for cleanup costs or mortgage protection, as well as coverage for third party
bodily injury or property damage claims.

This material is authored by sources external to the RT Specialty division of RSG Specialty, LLC and its accuracy, completeness and relevance has not been independently verified by RT Specialty. The information contained herein is intended for informational purposes only. Insurance coverage in any particular case will depend upon the type of policy in effect, the terms, conditions and exclusions in any such policy, and the facts of each unique situation. No representation is made that any specific insurance coverage would apply in the circumstances outlined herein. Please refer to the individual policy form for specific coverage details.

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