oEPA
United States
Environmental Protection
Agency
UPDATED 2018
Dollars and Sense:
F nancial Responsibility Requirements For
Underground Storage Tanks
A
Printed on Recycled Paper
EPA 510-K-18-001
July 2018

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EPA wrote this booklet for owners and operators of underground storage tanks (USTs).
This booklet briefly describes federal financial responsibility requirements for underground storage
tanks (USTs) storing petroleum. Many states and territories (referred to as states in this booklet)
have state program approval from EPA. To find a list of states with state program approval, see
www.epa.gov/ust/state-underground-storage-tank-ust-programs
If your UST systems are located in a state with state program approval, your requirements may be
different from those identified in this booklet. To find information about your state's UST
regulation, contact your implementing agency or visit its website. You can find links to state UST
websites at
If your UST systems are located in a state without state program approval, both the requirements
in this booklet and the state requirements apply to you.
If your UST systems are located in Indian country, the requirements in this booklet apply to you.
Free Publications About UST Requirements
Download or read Dollars and Sense on EPA's underground storage tank (UST) website at
H Order printed copies of many, but not all, of our documents from the National
Service Center for Environmental Publications (NSCEP), EPA's publication distributor: write to
NSCEP, PO Box 42419, Cincinnati, OH 45242; call NSCEP's toll-free number 800-490-9198; or fax
your order to NSCEP 301-604-3408.
Image credits:
Highland Tank & Manufacturing Company (steel tanks on cover and in headers)
u
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Contents
Why Are There Financial Responsibility Requirements? 							 1
Why Should Your USTs Meet These Requirements?	2
What Kinds Of USTs Must Meet These Requirements?							 3
How Much Financial Responsibility			4
Coverage Is Required?	4
How Can You Demonstrate Financial Responsibility?					5
What About State Financial Assurance Funds And Insurance Coverage?				 6
What Happens If Your Coverage Is Cancelled? What Records Must You Keep Or Report To
Others?																 7
Two Financial Tests	8
Model Of "Endorsement"													 9
Model Of "Certification Of Insurance"		 11
Model Of "Certification Of Financial Responsibility"		 13
Links For More Information 								14
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Why Are There Financial
Responsibility
Requirements?
The 1986 Superfund Amendments Reauthorization Act
amended Subtitle I of the Solid Waste Disposal Act and
directed the U.S. Environmental Protection Agency (EPA)
to develop financial responsibility regulations for owners
and operators of underground storage tanks (USTs) storing
petroleum. As of 2018, the U.S. Environmental Protection
Agency (EPA) regulates over one-half million underground
storage tanks that contain petroleum or hazardous
substances. L S I' facilities are owned by marketers who sell
gasoline to the public, such as service stations and
convenience stores, and nonmarketers who use USTs solely
for their own needs, such as fleet service operators and local
governments.
Many of these USTs have released or will release petroleum
into the environment through spills, overfills, or failures in
the tank and piping system. EPA's Office of Underground
Storage Tanks was formed in response to the discovery in
the early 1980s that thousands of USTs had leaked and
contaminated groundwater supplies in the United States.
While the number of annual releases since that time has
gone down significantly, releases of petroleum from USTs
into the environment are still a significant concern today.
Cleaning up these leaks can be costly. Congress wanted
owners and operators of USTs to demonstrate that they have
the financial resources - through insurance or other means
explained below - to pay for the costs of corrective action
and third-party liability that can result from leaking USTs.
EPA designed the financial responsibility requirements
to make sure that someone can pay the costs of cleaning
up leaks and compensating third-parties for bodily
injury and property damage caused by leaking USTs.
For an Overview of the federal requirements for USTs, see
EPA's booklet, Musts For USTs, at
https://www.epa.gov/ust/musts-usts on EPA's UST website.
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The financial responsibility
requirements are found in
the Code of Federal
Regulations,
40 CFR Part 280.
It is particularly important that someone be prepared to pay
cleanup costs so that cleanup activities can begin as quickly
as possible. Without fast action at contaminated sites,
contamination can spread and increase significantly the
chance of damaging the environment and human health.
Complying with the financial responsibility requirements
also protects you, as an owner or operator of USTs. If your
UST leaks, you may be faced with high cleanup costs or
with lawsuits brought by third parties. You will be able to
pay these costs if you have met the financial responsibility
requirements.
Also, if you cannot demonstrate financial responsibility by
the compliance deadline that applies to your UST facility,
you can be cited for violations and fined.
Who must demonstrate financial responsibility?
Either the owner or the operator of the UST must
demonstrate financial responsibility, if the owner and
operator are different individuals or firms. It is the
responsibility of the owner and operator to decide which one
will demonstrate financial responsibility.
Federal and state governments and their agencies that own
USTs are not required to demonstrate financial
responsibility. Local governments, however, must comply
with the financial responsibility requirements.
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An underground storage tank system (UST) is a tank and any
underground piping connected to the tank that has at least 10
percent of its combined volume underground. The federal
UST regulation for financial responsibility applies to owners
and operators of petroleum UST systems, with the following
exceptions.
These tanks are not covered by the financial responsibility
requirements:
•	Farm and residential tanks of 1,100 gallons or less
capacity holding motor fuel used for noncommercial
purposes;
•	Tanks storing heating oil used on the premi ses where it
is stored;
•	Tanks on or above the floor of underground areas,
such as basements or tunnels;
•	Septic tanks and systems for collecting storm water
and wastewater;
•	Flow-through process tanks;
•	Tanks of 110 gallons or less capacity, and tanks
holding a minimal concentration of petroleum; and
•	Emergency spill and overfill tanks.
Other storage sites not covered by the federal financial
responsibility requirements, such as surface impoundments,
are identified in the Code of Federal Regulations, 40 CFR
Part 280.
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How Much Financial
Responsibility
Coverage Is Required?
The amount of financial responsibility coverage you need is determined by the type of business
you operate, the amount of throughput of your tank, and the number of tanks you have. The table
below represents the required amounts of financial responsibility for groups of UST owners and
operators.
Group Of UST Owners
And Operators
Per Occurrence Coverage
Aggregate Coverage
Group 1:
Petroleum producers,
refiners, or marketers
$1 million
$1 million for 100 or fewer tanks
or
$2 million for more than 100
tanks
Group 2:
Nonmarketers
$500,000 if throughput is 10,000
gallons monthly or less
or
$1 million if throughput is more
than 10,000 gallons monthly
Basically, your financial responsibility amount falls into two types: per occurrence and annual
aggregate.
•	Per occurrence. Per occurrence means the amount of money that must be available to pay
the costs from one occurrence of a leaking UST. If your tank is used in petroleum production,
refining, or marketing such as service stations and truck stops, you must be able to
demonstrate that you have $1 million of per occurrence coverage. The per occurrence amount
may be less if your tanks are located at a facility not engaged in petroleum production,
refining, or marketing. In this case, if your facility has a monthly throughput of 10,000
gallons or less, you need $500,000 of per occurrence coverage.
•	Annual aggregate. You must also have coverage for an annual aggregate amount. The
annual aggregate amount is the total amount of financial responsibility that you must have to
cover all leaks that might occur in one year. The amount of aggregate coverage that you need
depends on the number of tanks that you own or operate: $1 million annual aggregate for 100
or fewer tanks; $2 million annual aggregate for more than 100 tanks.
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There are several options for demonstrating financial
responsibility. Each option is described fully in the Code of
Federal Regulations, 40 CFR Part 280
•	Use state financial assurance funds. Your state may
pay for some cleanup and third-party liability costs; see
page 6.
•	Obtain insurance coverage. Insurance may be
available from a private insurer or a risk retention group;
see page 6.
•	Obtain a guarantee. You may secure a guarantee for
the coverage amount from another firm with whom you
have a substantial business relationship. The provider of
the guarantee has to pass one of the financial tests
described on page 8.
•	Obtain a surety bond. A surety bond is a guarantee by
a surety company that it will meet your financial
responsibility obligations.
•	Obtain a letter of credit. A letter of credit is a contract
involving you, an issuer who is usually a bank, and a
third party such as the implementing agency that
obligates the issuer to help you demonstrate your
financial responsibility.
•	Pass a financial test. If your firm has a tangible net
worth of at least $10 million, you can prove your
financial responsibility by passing one of the two
financial tests described on page 8.
•	Set up a trust fund. You may set up a fully-funded trust
fund administered by a third party to demonstrate
financial responsibility.
•	Use other state methods. You may also use any
additional methods of coverage approved by your state
Local governments have four additional compliance
methods tailored to their special characteristics: a bond
rating test, a financial test, a guarantee, and a dedicated
fund; these are all fully described in 40 CFR Part 280.
You may also use a
combination of methods to
demonstrate financial
responsibility.
The methods you choose
must cover all the costs for
which you are responsible-
both corrective action and
third-party liability - and
add up to the amount of
coverage you are required to
demonstrate.
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What About State Financial
Assurance Funds And
Insurance Coverage?
State Financial Assurance Funds
Most states have established programs that can help pay for
cleanup and third-party liability costs resulting from leaking
petroleum USTs. Owners and operators of USTs may use
these state financial assurance funds to demonstrate
financial responsibility
Many state funds, however, pay only part of the cleanup
costs or require that you pay a deductible amount. Some
state funds do not pay for third- party liability costs. State
assurance funds often have eligibility requirements, such as
proof that the UST facility is in compliance with
requirements for leak detection and recordkeeping.
You should contact your state agency to determine if the
state has a fund that you may use to demonstrate financial
responsibility. Find out what the state will pay for and what
additional amount of financial responsibility, if any, you
must obtain. You can find links to state UST websites at
www.epa.gov/ust/underground-storage-tank-ust-
contacts#states.
Insurance Coverage
To make sure your insurance policy meets the financial
responsibility requirements, have your insurer fill out one of
the two following form s. If your UST insurance coverage is
an expansion of a policy you already have, your insurer
should give you an "Endorsement" document that completes
and reproduces the model form shown on page 9. If you get
a new policy, your insurer should give you a "Certificate of
Insurance" document that completes and reproduces the
model form shown on page 11. Keep the completed form in
your records, as explained on page 7.
You may also be able to get insurance coverage through a
risk retention group. A risk retention group is an insurance
company formed by businesses or individuals with similar
risks to provide insurance coverage for those risks.
If you don't know how to
reach your state agency, see
the links to state UST
websites at
You should be aware that
insurers may require you to
meet certain conditions for
coverage. For example, your
insurer may require you to
test your tank for tightness
or make improvements in
your tank system, such as
adding corrosion protection.
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What Happens If Your Coverage Is Cancelled? What
Records Must You Keep Or Report To Others?
Cancellation
Your financial responsibility method must specify that the
provider may cancel your coverage only after sending you
advance written notice. Insurance, risk retention group, and
state fund coverage can be cancelled only 60 days after you
receive the cancellation notice. Guarantees, surety bonds, and
letters of credit can be cancelled only 120 days after you
receive the cancellation notice. You must find replacement
coverage within 60 days after you receive the notice of
cancellation. If you cannot get replacement coverage, you
must notify your implementing agency.
Recordkeeping
You must keep at your UST site or your place of business the
following records of financial responsibility coverage:
•	A current "Certification of Financial Responsibility";
see page 13 for a model of this form that you must
complete and reproduce; and
•	Any additional documentation that shows your
financial responsibility method is valid and provides
details on the method's coverage, such as signed
copies of official letters, policies, and state fund
agreements.
Keep these records until your UST site is properly closed.
Keeping clear records makes good business sense. If asked
by UST inspectors or regulatory officials to demonstrate your
financial responsibility, you can use these records to
demonstrate quickly your compliance with the financial
responsibility requirements.
Many states require you to file copies of your financial
responsibility records with the state agency, so check with
your state to see what you need to do. You do not need to
report financial responsibility records to the federal EPA
unless you have been requested to do so.
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Test 1
•	Your firm must have a tangible net worth of at least $ 10
million; and
•	Your firm must have a tangible net worth of a least 10
times the amount of aggregate coverage that you are
required to demonstrate plus any other liability coverage
for which your firm is using the test to demonstrate
financial responsibility to EPA; and
•	Your firm must file the firm's annual financial statements
with the Securities and Exchange Commission (SEC), or
annually report the firm's tangible net worth to Dun and
Bradstreet and receive a rating of 4A or 5A. Utilities may
file financial statements with the Energy Information
Administration or the Rural Utilities Service; and
•	Your firm must have audited financial statements that do
not include an adverse auditor's opinion or disclaimer of
opinion.
Test 2
•	Your firm must have a tangible net worth of at least $10
million; and
•	Your firm must have a tangible net worth of at least 6
times the amount of aggregate coverage that you are
required to demonstrate; and
•	Have U.S. assets that are at least 90 percent of total assets
or at least 6 times the required aggregate amount; and
•	Have net working capital at least 6 times the required
aggregate amount, or a bond rating AAA, AA, A, or BBB
from Standard and Poor's, or Aaa, Aa, A, or Baa from
Moody's; and
• Your firm must have audited financial statements that do
not include an adverse auditor's opinion or disclaimer of
opinion.
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Model Of "Endorsement
Name: [name of each covered location]
Address: [address of each covered location]
Policy Number:
Period of Coverage [current policy period]:
Name of [Insurer or Risk Retention Group]:
Address of [Insurer or Risk Retention Group]:
Name of Insured:
Address of Insured:
1.	This endorsement certifies that the policy to which the endorsement is attached provides
liability insurance covering the following underground storage tank(s):
[List the number of tanks at each facility and the name(s) and address(es) of the facility(ies)
where the tanks are located. If more than one instrument is used to assure different tanks at any
one facility, for each tank covered by this instrument, list the tank identification number provided
in the notification submitted pursuant to 40 CFR 280.22, or the corresponding state requirement,
and the name and address of the facility.] for [insert: "taking corrective action" and/or
"compensating third parties for bodily injury and property damage caused by" either "sudden
accidental releases" or "nonsudden accidental releases" or "accidental release"; in accordance
with and subject to the limits of liability, exclusions, conditions, and other terms of the policy; if
coverage is different for different tanks or locations, indicate the type of coverage applicable to
each tank or location] arising from operating the underground storage tank(s) identified above.
The limits of liability are [insert the dollar amount of the "per occurrence" and "annual
aggregate" limits of the Insurer's or Group's liability; if the amount of coverage is different for
different types of coverage or for different underground storage tanks or locations, indicate the
amount of coverage for each type of coverage and/or for each underground storage tank or
location], exclusive of legal defense costs, which are subject to a separate limit under the policy.
This coverage is provided under [policy number]. The effective date of said policy is [date],
2.	The insurance afforded with respect to such occurrences is subject to all of the terms and
conditions of the policy; provided, however, that any provisions inconsistent with subsections (a)
through (e) of this Paragraph 2 are hereby amended to conform with subsection (a) through (e):
a.	Bankruptcy or insolvency of the insured shall not relieve the ["Insurer" or "Group"] of its
obligations under the policy to which this endorsement is attached.
b.	The ["Insurer" or "Group"] is liable for the payment of amounts within any deductible
applicable to the policy to the provider of corrective action or a damaged third party, with a right
of reimbursement by the insured for any such payment made by the ["Insurer" or "Group"]. This
provision does not apply with respect to that amount of any deductible for which coverage is
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demonstrated under another mechanism or combination of mechanisms as specified in 40 CFR
280.95-280.102 and 280.104-280.107.
c.	Whenever requested by [a Director of an Implementing Agency], the ["Insurer" or "Group"]
agrees to furnish to [the Director] a signed duplicate original of the policy and all endorsements.
d.	Cancellation or any other termination of the insurance by the ["Insurer" or "Group"], except
for non-payment of premium or misrepresentation by the insured, will be effective only upon
written notice and only after the expiration of 60 days after a copy of such written notice is
received by the insured. Cancellation for non-payment of premium or misrepresentation by the
insured will be effective only upon written notice and only after expiration of a minimum of 10
days after a copy of such written notice is received by the insured.
[Insert for claims-made policies:
e.	The insurance covers claims otherwise covered by the policy that are reported to the ["Insurer"
or "Group"] within six months of the effective date of the cancellation or non-renewal of the
policy except where the new or renewed policy has the some retroactive date or a retroactive date
earlier than that of the prior policy, and which arise out of any covered occurrence that
commenced after the policy retroactive date, if applicable, and prior to such policy renewal or
termination date. Claims reported during such extended reporting period are subject to the terms,
conditions, limits, including limits of liability, and exclusions of the policy.]
I hereby certify that the wording of this instrument is identical to the wording in 40 CFR
280.97(b)(1) and that the ["Insurer" or "Group"] is ["licensed to transact the business of
insurance or eligible to provide insurance as an excess or surplus lines insurer in one or more
states".]
[Signature of authorized representative of Insurer or Risk Retention Group]
[Printed name of person signing]
[Title of person signing], Authorized Representative of [name of Insurer of Risk Retention
Group]
[Address of Representative]
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Model Of "Certification Of
Insurance"
Name: [name of each covered location]
Address: [address of each covered location]
Policy Number:
Period of Coverage [current policy period]:
Name of [Insurer or Risk Retention Group].
Address of [Insurer or Risk Retention Group]:
Name of Insured:
Address of Insured:
1.	[Name of Insurer or Risk Retention Group], [the "Insurer" or "Group"], as identified above,
hereby certifies that it has issued liability insurance covering the following underground storage
tank(s):
[List the number of tanks at each facility and the name(s) and address(es) of the facility(ies)
where the tanks are located. If more than one instrument is used to assure different tanks at any
one facility, for each tank covered by this instrument, list the tank identification number provided
in the notification submitted pursuant to 40 CFR 280.22, or the corresponding state requirement,
and the name and address of the facility.] for [insert: "taking corrective action" and/or
"compensating third parties for bodily injury and property damage caused by" either "sudden
accidental releases" or "nonsudden accidental releases" or "accidental release"; in accordance
with and subject to the limits of liability, exclusions, conditions, and other terms of the policy; if
coverage is different for different tanks or locations, indicate the type of coverage applicable to
each tank or location] arising from operating the underground storage tank(s) identified above.
The limits of liability are [insert the dollar amount of the "per occurrence" and "annual
aggregate" limits of the Insurer's or Group's liability; if the amount of coverage is different for
different types of coverage or for different underground storage tanks or locations, indicate the
amount of coverage for each type of coverage and/or for each underground storage tank or
location], exclusive of legal defense costs, which are subject to a separate limit under the policy
This coverage is provided under [policy number]. The effective date of said policy is [date],
2.	The ["Insurer" or "Group"] further certifies the following with respect to the insurance
described in Paragraph 1:
a.	Bankruptcy or insolvency of the insured shall not relieve the ["Insurer" or "Group"] of its
obligations under the policy to which this endorsement is attached.
b.	The ["Insurer" or "Group"] is liable for the payment of amounts within any deductible
applicable to the policy to the provider of corrective action or a damaged third party, with a right
of reimbursement by the insured for any such payment made by the ["Insurer" or "Group"]. This
provision does not apply with respect to that amount of any deductible for which coverage is
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demonstrated under another mechanism or combination of mechanisms as specified in 40 CFR
280.95-280.102 and 280.104-280.107.
c.	Whenever requested by [a Director of an Implementing Agency], the ["Insurer" or "Group"]
agrees to furnish to [the Director] a signed duplicate original of the policy and all endorsements.
d.	Cancellation or any other termination of the insurance by the ["Insurer" or "Group"], except
for non-payment of premium or misrepresentation by the insured, will be effective only upon
written notice and only after the expiration of 60 days after a copy of such written notice is
received by the insured. Cancellation for non-payment of premium or misrepresentation by the
insured will be effective only upon written notice and only after expiration of a minimum of 10
days after a copy of such written notice is received by the insured.
[Insert for claims-made policies:
e.	The insurance covers claims otherwise covered by the policy that are reported to the ["Insurer"
or "Group"] within six months of the effective date of the cancellation or non-renewal of the
policy except where the new or renewed policy has the some retroactive date or a retroactive date
earlier than that of the prior policy, and which arise out of any covered occurrence that
commenced after the policy retroactive date, if applicable, and prior to such policy renewal or
termination date. Claims reported during such extended reporting period are subject to the terms,
conditions, limits, including limits of liability, and exclusions of the policy.]
I hereby certify that the wording of this instrument is identical to the wording in 40 CFR
280.97(b)(2) and that the ["Insurer" or "Group"] is ["licensed to transact the business of
insurance or eligible to provide insurance as an excess or surplus lines insurer in one or more
states".]
[Signature of authorized representative of Insurer or Risk Retention Group]
[Printed name of person signing]
[Title of person signing], Authorized Representative of [name of Insurer of Risk Retention
Group]
[Address of Representative]
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Model Of "Certification Of
Financial Responsibility"
[Owner or operator] hereby certifies that it is in compliance with the requirements of Subpart H
of40CFR Part 280.
The financial assurance mechanism(s) used to demonstrate financial responsibility under Subpart
H of 40 CFR Part 280 is (are) as follows:
[For each mechanism, list the type of mechanism, name of issuer, mechanism number (if
applicable), amount of coverage, effective period of coverage and whether the mechanism covers
"taking corrective action" and/or "compensating third parties for bodily injury and property
damage caused by" either "sudden accidental releases" or "non-sudden accidental releases" or
"accidental releases."]
[Signature of owner or operator]
[Printed name of owner or operator]
[Title]
[Date]
[Signature of witness or notary]
[Printed name of witness or notary]
[Date]
Note: The owner or operator must update this certification whenever the financial assurance
mechanism(s) used to demonstrate financial responsibility change(s).
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Government Links
•	U.S. Environmental Protection Agency's Office of
Underground Storage Tanks: www.epa.gov/ust.
EPA's UST compliance assistance:
www.epa.gov/ust/resources-owners-and-operators
•	State UST program contact information:
www.epa.gov/ust/underground-storage-tank-ust-
contacts#states
•	Tanks Subcommittee of the Association of State and
Territorial Solid Waste Management Officials
(ASTSWMO): www.astswmo.org

New England Interstate Water Pollution Control
Commission (NEIWPCC): www.neiwpcc.org
Other Organizations To Contact For UST
Information
www.epa.gov/ust/underground-storage-tank-ust-
contacts#otber
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*>EPA
United States
Environmental Protection
Agency
United States Environmental Protection Agency
5401R
Washington, DC 20460
EPA 510-K-18-001
July 2018

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