Cost of oil and hazardous liquid spills and who pays for it
The media likes shocking its audience by covering incidents of major oil, chemical and hazardous liquid spills which cost astronomical amounts of money for companies who failed to provide safety for the environment. For example, the Deepwater Horizon oil spill in April 2010 cost BP $61 billion. Yet most spills are smaller, happen much more often and still have tangible costs for businesses.
There are many factors to be aware of when your business may have to deal with hazardous spills. Senior management should be aware of them to proactively protect their business from risk.
What Does the Cost of Oil and Hazardous Liquid Spills Include?
● Clean up. Must happen immediately! It includes spill response actions, on-site sampling and analysis, full environmental site investigation and remediation of contaminated sites.
● Containment. Where spills of oils or liquids are contained within a barrier or drainage system rather than being absorbed in the surface.
● Natural resource damage assessment and restoration. The party responsible for the spill must restore natural resources injured as a result of oil spills or hazardous substance releases into the environment. And pay for it too!
● Property Damage. Oil spills can cause the oil to permeate a property. In this case, the other party is entitled to compensation.
● Litigation. This is what most people think of when it comes to the financial repercussions of an oil spill. And it is understandable as the final bill from litigation specialists can be significant.
● Mitigation. The action of reducing the severity and seriousness of possible consequences for the environment and communities may involve specialists from diverse areas and industries. It does cost money.
● Fines and penalties. To make it brief – they are high. And it is important to remember that insurance companies do not pay fines and penalties arising from the failure to report spills or for late reporting.
● Public Relations. Inevitable increased spend on marketing and PR efforts to counteract the inevitable negative public perception if a spill is big enough to gain media coverage.
Who Pays For Oil Spills?
The cost of a hazardous liquid or oil spills should not be paid for by the public but only be shouldered by those culpable. While liability can take insurance companies and lawyers time to determine, the spill clean-up must happen immediately.
There is more to the cost of a spill than simply removing the oil or chemicals. If you are found liable for a spill, the costs can include items you didn’t even realize would be factored in. It is so much easier and cost-effective to prevent hazardous spills rather than take response actions. It is cheaper for companies to become eco-friendly and compliant with local environmental regulations.
To protect your facilities from spill learn about our Spill Prevention Mat