Why General Flood Insurance May Fall Short In Protecting Against Hurricane Pollution

In the past, hurricanes like Maria, which tragically claimed more than 3,000 lives in Puerto Rico, and Hurricanes Katrina and Harvey, each causing an estimated $125 billion in damages, have shown that pollution from industrial spills can be just as damaging. One example is the Arkema chemical plant disaster during Hurricane Harvey, where the release of hazardous chemicals after an explosion illustrated the severe environmental dangers, hurricanes can bring. The Houston Chronicle documented over 100 toxic spills during Harvey, underscoring the scale of contamination that can occur after a storm.

Ongoing Risks in High-Hazard Zones

The oil, gas, and chemical facilities located in hurricane-prone regions, especially along the Gulf Coast, face elevated risks of pollution during storms. For example, during Hurricane Katrina, around 8 million gallons of oil were spilled across the Gulf Coast. Similarly, Hurricane Harvey led to numerous oil spills in the Houston area, compounding environmental damage.

Recent storms have further exacerbated these concerns. In 2023, Hurricane Idalia caused significant flooding across Florida’s Bone Valley, home to the country’s largest phosphate mining operations. This region has seen chemical breaches in the past due to flooding, and Idalia intensified fears of future contamination. In 2024, Hurricane Helene, with a powerful 10-foot storm surge in Florida’s Big Bend region, caused significant flooding and potential chemical leaks across oil refineries and chemical plants in the area.

Following close on its heels, Hurricane Milton also struck the Gulf Coast in 2024, producing a storm surge of 10 to 15 feet in Tampa Bay. With its immense floodwaters, Milton overwhelmed several industrial facilities, triggering spills from oil storage tanks and chemical plants. The full extent of the contamination from these back-to-back hurricanes is still being assessed, but initial reports indicate widespread pollution across both hurricanes’ impact zones.
Houston Chronicle | Discover Magazine.

Why Risk Management and Insurance Matter

Given the increasing frequency and intensity of these hurricanes, it’s crucial for businesses in these regions to have comprehensive risk management strategies. However, many companies falsely assume that general flood insurance will cover hurricane-related pollution risks. Specialized pollution insurance is often necessary, as traditional policies may not cover the costs associated with environmental damage or long-term contamination.

For instance, while the Arkema plant had contingency plans, Harvey’s unprecedented flooding rendered those plans ineffective, leading to a disaster that continues to result in litigation and long-term environmental monitoring. Similar incidents are being reported after Hurricanes Helene and Milton, highlighting the need for businesses to reassess their emergency response plans regularly.

Broader Implications for Landowners

It’s not just the companies managing oil, gas, and chemicals that are at risk. Contaminants released during a hurricane can spread over vast areas, affecting landowners far from the original site of pollution. In many cases, these property owners are left with hefty cleanup bills and may be subject to environmental lawsuits, even if the contamination wasn’t caused by their own operations.

Protect Your Business and the Environment

As hurricanes become more unpredictable and destructive, it’s essential not to underestimate the risks they pose to your business. Ensure that you have the proper pollution coverage in place and work with experts who understand the complex environmental risks you face. MB Davis Group specializes in commercial insurance consulting and can help tailor a strategy that protects your business from both financial and environmental liabilities. Contact us today or schedule a no-charge consultation and safeguard your business before the next storm strikes.