Sunoco, a petroleum and petrochemical manufacturing giant, will pay $2.2 million in Massachusetts to resolve a hazardous waste dispute. The company was alleged to have sought payment from a state fund for hazardous waste cleanup, while at the same time it was also seeking and obtaining reimbursement from its insurers. The state’s fund for hazardous waste cleanup is called Massachusetts Underground Storage Tank Petroleum Product Cleanup Fund program (UST Fund).

The fund was established to expedite the cleanup of environmentally dangerous leaks from underground storage tanks — such as those found at gasoline stations — by reimbursing owners and operators for expenses incurred in their response. Massachusetts charges tank registration and delivery fees to fund the program. The UST fund’s regulations stipulate that claimants must disclose if they sought reimbursement from another source including insurance for expenses they submit to the UST fund. If claimants do recover money from both insurance and the fund for the same expenses, they must pay back the UST fund.

According to Massachusetts Attorney General Coakley, Sunoco failed to disclose its insurance coverage litigation and settlements reached between 1997 and 2001, even as it sought and obtained reimbursements from the UST Fund program. Under the settlement agreement, Sunoco will pay $970,000 to the fund and $1.23 million to the state’s Commonwealth General Fund. It appears from all accounts that Sunoco cooperated fully with the Attorney General’s investigation.

Source: Insurance Journal