October 01, 2018 [Canadian Underwriter] - Clients who make tanks for flammable and hazardous material cannot always obtain insurance covering the full range of product and pollution liability.
Matrix Service Company, whose products include above-ground fuel tanks, said Wednesday its products can potentially expose it to professional liability, product liability and pollution liability claims.
“We may not be able to obtain or maintain adequate insurance to cover these claims,” Matrix said in its annual report for the 12 months ending June 30, released Sept 12. “We perform construction and maintenance services at large industrial facilities where accidents or system failures can be disastrous and costly.”
Matrix – a global firm based in Tulsa, Oklahoma – did not go so far as to say it is actually under-insured. Matrix has two sites in Ontario (Sarnia and Burlington) and another two in Alberta (Calgary and Leduc). Matrix did not mention any actual losses or claims, but it is standard practice for publicly-traded companies to mention in their financial reports any risks that could affect the bottom line.
In addition to above-ground tanks, Matrix’s other offerings include storage tanks for liquefied natural gas, liquid nitrogen/liquid oxygen and liquid petroleum. It also makes truck and rail loading and offloading facilities.
Matrix said Wednesday its projects “often involve highly regulated materials, including hazardous wastes.” If such materials are improperly handled, this could result in administrative, civil and criminal penalties as well as an obligation to clean up pollution.
Matrix suggested in its report it could also be held accountable for misconduct on the part of employees or subcontractors.
“Such misconduct could include the failure to comply with safety standards, laws and regulations, customer requirements, regulations pertaining to the internal controls over financial reporting, environmental laws and any other applicable laws or regulations,” Matrix reported.
Other risks Matrix mentioned in its financial report include cyber. “Our insurance coverage may not be adequate to cover all the costs related to cyber-attacks or disruptions resulting from such events,” Matrix noted.
The company said it has experienced cyber security threats to its IT infrastructure “and have experienced cyber-attacks, attempts to breach our systems and other similar incidents,” though those incidents had no “material impact” on its financial health. But “future threats could cause harm to our business and our reputation.”
—————————-
TankTerminals.com – Research, Market and Expand Your Presence within the Tank Storage Industry. Learn more.
