A tank explosion resulted from an overfill incident at a refined products terminal, which prompted claims by product suppliers for extensive business interruption losses. At contest was the root cause of the tank overfill-whether equipment failure, operational error, inadequate maintenance, improper construction, or some combination. Data analysis pertaining to these potential causes, including site visits to the terminal and monitoring system manufacturer, formed the basis of opinion of what happened and why.

The owners of a fuel products storage terminal formed a special purpose company to operate and maintain the facilities on their behalf. Products were stored and distributed by pipeline and road transport under contracts between the owners and various product suppliers.

During a storage tank filling operation, a tank overfill incident occurred which resulted in an explosion. There was substantial property damage as well as major fuel supply disruptions. The product suppliers, as well as other affected parties, many of which had incurred large business interruption losses, initiated legal action against the operator and one of the owners, alleging full responsibility and liability for the incident. In its defense, the operator contended that the root cause of the overfill incident was a failure of equipment, which could not have been foreseen.

Baker & O'Brien was engaged to provide an expert opinion on the root cause-equipment failure, operational error, poor procedures, inadequate maintenance, improper construction, or some combination of these. Our consultants analyzed all available maintenance and operating records; visited the manufacturer of the tank monitoring system; visited other facilities employing similar systems; examined technical aspects of the tank instrumentation and related equipment; studied a complete reconstruction of operator displays and events leading up to the incident; and reviewed standard industry procedures and practices for filling of petroleum storage tanks. Following a detailed assessment of all these factors, an expert report was prepared and submitted to the client. Our opinions were used in the client's discussions with the other parties regarding what led to the disaster and how to prevent similar occurrences in the future.