Guide to domestic oils spills and home insurance
What are my legal responsibilities for oil spills? What will my home insurance policy cover?
Home insurance policies provide some cover for loss of oil, tracing oil leaks and damage caused to your land and property as a result of a spill. Clean up costs for oil spills can be very high, particularly if oil contaminates water ways, and insurance companies will only cover the cost in limited circumstances. We review standard clauses commonly found in home insurance policies and compare with Home Spill oil insurance. Our best advice is to maintain the tank or fit a new one if it’s in poor condition and/or non-complaint. If that time has come, try our Guide to fitted oil tank costsand Guide to oil tank regulations
Home Insurance Policies
Standard home insurance cover will reimburse you for the loss of metered oil as a result of theft or accidental damage (not wear and tear) and consequential damage caused to buildings and landscaped features. It will often only cover pollution clean-up costs if the leak is caused by “a sudden, unexpected, unintended and expected incident”. This excludes gradual leaks.
Oil Spill Insurance
Home oil spill insurance is a more comprehensive policy that specifically cover oil spillages and contamination clean-up costs up to £250,000 (depending on your level of cover). Limitations still apply and the policy will only come into force after the tank system has been inspected and confirmed as eligible.
Your duties as an oil tank owner
Oftec engineers do not have powers to cut off your heating system due to serious defects on your oil tank, although they may refuse to work on your system unless you do. In regulatory terms there is nothing to force you replacing or upgrading your tank installation.
However, anyone who stores heating oil is obliged to ensure that the substance will not release into the environment. As an oil tank owner, you are directly responsible for the clean-up costs of any spills that occur and any consequential damage.
Your home insurance policy provides some cover, although it is very limited for oil spills and contamination. Home spill insurance is an option to extend your cover further. The most effective steps are preventative.
Home Insurance + Oil Spill Cover
Oil spill cover is a new insurance product (available from 2017) that works in addition to your home insurance cover. Where the policies overlap the Oil Spill insurer may claim 50% of the costs back from your home insurer. The table below sets out the cover under each policy.
|Liability||Home Insurance Cover||Oil Spill Cover|
|Loss of metered oil due to theft or accidental damage||Between £500 - £2000 depending on the level of cover. It will not cover loss due to wear and tear or poor maintenance.||This does not form part of oil spill insurance|
|Trace and access to find the source of the leak||Covered under home insurance often with a cap, for example £5,000.||
Carry out emergency works to prevent and minimise damage, trace, access, treat, immobilise and remove polluted soil and/or water.
Repair or replace buildings, structures or soft landscaping damage in the course of emergency works to trace and access the leak up £10,000.
Total liability for above in any one period of insurance is £10,000 or £25,000 depending on the level of cover, including sub-limits.
|Environmental contamination clean-up costs||No specified cap, but cover is restricted to "a sudden, unexpected, unintended and expected incident"||
Will cover most types of oil spill, including gradual leaks over time.
Capped at £100,000 or £250,000 (depending on the level of cover) in any one period of insurance for environmental clean-up, emergency works and third party property damage or bodily injury.
The tank may not be accepted onto the policy at the outset if it is poor condition or not complaint.
Cover does not extend to leaks or damage caused by neglect or wear and tear.
The tank must be regularly maintained.
The insurer will carry out an inspection of the oil tank prior to insuring it.
On an annual basis, the tank must be inspected by an Oftec engineer and any remedial or repair works taken out. The tank must be under 15 years old and on a compliant hard stand.
NB the policy does not cover a spill from a decommissioned or abandoned oil tank.
|Obligations of the oil tank owner||The tank must be in good repair when taken onto the policy and properly maintained.||
The tank must be in good repair, under 15 years old and on a complaint hard stand in order to be taken on by the insurer.
The policy holder must arrange an annual inspection by an Oftec engineer and all recommendations carried out/records retained.
As with all insurance policies, home insurance and oil spill insurance really only cover the accidental, the unexpected and the hard to mitigate. You can reduce the risk of a claim by making sure your tank is complaint and secured. New integrally bunded tanks are the best way to avoid oil spills altogether, as the outer container will catch all of the oil in the inner container should it leak.
Providing oil supply pipes are continuous, i.e. without joins, the only weak points are the connections either end, both of which are easy to access and monitor.
In all cases, an annual inspection by an Oftec registered engineer will identify any weaknesses and recommend remedial and maintenance works.
For more on the current requirements for oil tanks, try our Guide to Oil Tank Regulations