Owners and operators of
regulated underground
storage tanks (USTs) on tribal
lands must comply with
federal UST regulations.
This compliance assistance
brochure highlights best
management practices for
demonstrating financial
responsibility through
insurance.
Note: This document is a
resource to promote
compliance and does not
replace the federal UST
regulations.
EPA developed this
brochure to help UST
owners and operators in
Indian country comply with
the federal UST regulations.
This brochure is one in a
series of EPA compliance
assistance brochures
designed to help owners and
operators comply with UST
regulations.
Other brochures focus on
spill buckets, overfill
protection, recordkeeping and
notification, financial
responsibility, and tank and
piping release detection.
www.eDa.qov/oust/Dubs
m
,
&EPA
Office of Underground Storage Tanks
www.epa.gov/oust
August 2013
EPA-510-F-13-002
Compliance Assistance In
Indian Country
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FINANCIAL RESPONSIBILITY:
INSURANCE
Owners and operators of regulated underground
storage tanks (USTs) are required to maintain
financial responsibility.
What is financial responsibility (FR)?
If you own and operate a regulated UST, you must
ensure money is available to pay for cleanup costs,
bodily injury, and property damages resulting from
releases. FR is required for all regulated USTs.
How can you demonstrate FR?
There are several ways to show FR (e.g., obtain
insurance; use a state fund; self-insure; obtain a
corporate guarantee, surety bond, or letter of credit;
or use a trust fund administered by a third party).
Tribal and local governments can use a bond rating
test, a financial test, obtain a guarantee, or use a
dedicated fund. However, this
brochure focuses on insurance, which
is frequently obtained by owners and
operators.
You can obtain a commercial liability
insurance policy for pollution from a
licensed insurer or risk retention group.
The policy promises payment for cleanup and third
party liability claims. Your insurance may be
provided in the form of a separate policy or an
endorsement to an existing policy to satisfy the FR
requirement.
All policies must provide coverage for cleaning up a
release and paying for property damage and bodily
injury, and the policy must provide a separate
coverage for legal defense costs. You will have to
make choices on what type of policy to purchase.
Differences in policy terms will affect the cost of the
policy and what the policy covers.
For a summary of UST owners' and operators' financial re-
sponsibilities under federal UST regulations, see EPA's
Dollars and Sense: Financial Responsibility Requirements
tor (jn derground Storage Tanks at
www.epa.gov/oust/pubs/dollars.htm You may also order free
What are the basic parts of an insurance
policy?
^ The declarations page provides the coverage
summary. The type, size, and location of the
covered USTs should be listed on the
declarations page (or as an endorsement).
Make sure that your UST information is
correctly listed.
^ The insuring agreement describes what is
covered under the policy, which includes:
* Definitions of the policy terms.
Review what is defined as a pollution
condition or a release;
* Exclusions of what is not covered; and
* Policy conditions that you must meet in
the event of a claim or policy cancellation.
^ Endorsements or amendments are provisions
that modify the conditions of the original
insuring agreement. Required language for
endorsements and amendments can be found
on pages 10-11 in EPA's Dollars and Sense
at www.epa.qov/oust/pubs/dollars.htm. Keep
this document with your policy.
Before purchasing a policy read it carefully.
Discuss the policy with your agent or broker to
make sure you understand your responsibilities,
should a release occur from your UST.
How much insurance do you need?
The amount of coverage needed depends on :
^ Type of business you operate;
^ Amount of throughput of your tank;
^ Number of tanks you have.
copies by calling (800) 490-9198.
Type Of UST
Owner And
Operator
Petroleum
producers,
refiners, or
marketers
Nonmarketers
Per Occurrence
Coverage
$1 million
$500,000 -monthly
throughput 10,000
gallons or less
$1 million - monthly
throughput is more
than 10,000 gallons
Aggregate
Coverage
$1 million for
100 or fewer
tanks or
$2 million for
more than 100
tanks
What should you ask when purchasing an
insurance policy?
The questions below are very important, and
depending on how your policy is written, your
insurance may not pay for a release from your tank.
^ Is this a confirmed or suspected release policy?
^ What is the company's policy on excluding tanks
over certain ages?
^ Can a retroactive date be carried from a
previous or existing policy (for claims-made
policies)?
^ What are your reporting responsibilities should a
release occur?
You should ask your agent or broker:
^ Does the agent or broker have experience in
issuing UST policies or know the federal UST
regulations?
^ Who has the insurer provided with this type of
policy and can they provide you with names of
clients?
Insurance policies must:
^ Provide a separate limit of coverage for legal
defense costs;
^ Provide first dollar coverage and a six month
extended reporting period for claims-made
policies; and
^ Include an endorsement or certificate stating
coverage amount, coverage purpose, and
conditions that become part of the policy.
What records should you keep?
Maintain an updated certification of insurance that is
signed by the owner or operator and a witness or
notary. The required wording for certification can be
found at 40 CFR 280.111.
Maintain any additional documentation that shows
your insurance coverage is valid and provides
details on the coverage.
Keep these records on-site or readily available upon
request until the site is permanently closed.
For a list of insurance providers who may be able to help you
comply with FR see EPA's List Of Known Insurance Provid-
ers For Underground Storage Tank Owners And Operators a t
www.epa.gov/oust/pubs/inslist.htm. You may also order free
copies by calling (800) 490-9198.
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