www.fueloilnews.com | FUEL OIL NEWS | OCTOBER 2015 39
BUSINESS OPERATIONS
l F O N
a farm in Ontario, Koch said, a judge noted a lack of oversight by
the insurance company that was paying for the engineering and
remediation. From an estimate of less than $200,000, the cost of
remediation climbed "to well over a million dollars," Koch said.
"This is one of the challenges," he said.
"In our minds there are two options," Koch said: legislation
and regulation to eliminate conflicts and require due diligence
by insurers; or court challenges to block conflicts of interest.
The former approach would likely take longer, requiring
a political and legislative campaign, Koch noted. Court chal-
lenges to every conflict of interest "would put pressure upon
the insurers to follow the best process and best cost to fulfill the
requirements of remediation on [a] particular property," Koch
said. The aim over the next year is to ensure that "everyone
understands the issue," Koch said.
REDUCE REMEDIATION RESPONSE TIME
The advisory council expressed concern about the time it takes
to start a cleanup. There have been cases where oil "has sat on
the ground for a week before anybody cleaned it up," Koch said.
"This is a very complicated issue," he said.
"Once a spill happens it really falls upon the insurer and the
homeowner to rectify the situation, and then identify other orga-
nizations… and subrogate against them for the damages," Koch
said. A problem is that in some cases insurers have a process that
was developed for vehicle insurance or other types of insurance and
they follow that process, which Koch said entailed sending someone
out to investigate the spill, writing a report, and getting it approved
by the insurance company. Then the insurer finds a company to do
the clean up. "It could take anywhere from two days to two months,
depending on the complexity of the spill," Koch said.
It is widely recognized that "quick remediation processes can
reduce the cost of remediation by up to 30%," Koch said.
The goal is a process that "starts cleanup right away and gets
the product stable and not migrating to other parts of the prop-
erty or into the foundation," Koch said.
"This one is a challenge because we really have no jurisdiction
[regarding] how to clean it up and when to clean it up," Koch
said. "We're really relying upon engagement by the insurance
companies and the claims people to find better ways to start the
process of mitigating damage."
Koch said, "I think everybody agrees if a technician or an oil
fuel distributor sees a leak they should be able to mitigate that
leak as quickly as possible. But in some jurisdictions in Canada
the insurer will not allow anyone to touch that until they have
their review process done. It can be very costly."
