Owners/operators (O/Os) of petroleum underground storage tanks (USTs) are required to provide financial responsibility (FR) for taking corrective action and for compensating third parties for bodily injury and property damage arising from a release by petroleum USTs. The O/Os must utilize one of the following FR mechanisms.
- Financial test of self insurance
- Guarantee
- Insurance and risk retention group coverage
- Surety bond
- Letter of credit
- Trust fund
- Standby trust fund
- Other methods for local units of government (local government bond rating test, local government financial test, local government guarantee, local government fund).
Beginning October 1, 2000, O/Os will receive a requirement notice of FR along with the annual registration invoice. This will require the submittal of FR information along with the remittance of UST fees. If the FR mechanism is by an insurance or risk retention group, see the example for the required language and formatting to be submitted to verify proper insurance. Please do not submit an entire insurance policy. Failure to provide proof of FR may result in enforcement actions, including but not limited to red tagging of USTs. The Waste and Hazardous Materials Division (WHMD) may also pursue civil and/or criminal actions as authorized under Part 211, Underground Storage Tank Regulations, of the Natural Resources and Environmental Protection Act, 1994 PA 245, as amended.
If there are any questions, please contact Mr. Kevin Wieber at 517-335-7260, or e-mail at Wieberk@michigan.gov
The publication Michigan Dollars and Sense provides further information on why FR is required, USTs that need to meet the FR, and the amount of coverage.
Rule Citations: The FR requirements are cited in Rule 61, Section 280.90, of the Michigan Underground Storage Tank Rules (MUSTR), 1999 AACS, R 29. 2161 et seq. For local units of government allowable mechanisms see MUSTR Sections 280.95 through 280.103 and Sections 280.104 through 280.107 The policy for enforcement of FR is given in Informational Memo 6.
Financial Responsibility : Certificate of Insurance
Owners/Operators may verify from the WHMD that their Insurance Certificate is appropriate by submitting a certificate that has the following required language and formatting. THIS IS A SAMPLE ONLY: USE THE CERTIFICATE ISSUED BY THE INSURANCE COMPANY. THE OWNER/OPERATOR CANNOT SIGN THIS SAMPLE CERTIFICATE. If there are any questions, please contact Kevin Wieber at 517-335-7260, or e-mail at Wieberk@michigan.gov
NAME: [NAME OF COVERED LOCATION]
ADDRESS: [ADDRESS OF COVERED LOCATION]
POLICY NUMBER:
ENDORSEMENT: [IF APPLICABLE]
PERIOD OF COVERAGE:
NAME OF INSURER:
ADDRESS OF INSURER:
NAME OF INSURED:
ADDRESS OF INSURED:
CERTIFICATION:
- [NAME OF INSURER], THE "INSURER", AS IDENTIFIED ABOVE, HEREBY CERTIFIES THAT IT HAS ISSUED LIABILITY INSURANCE COVERING THE FOLLOWING UNDERGROUND STORAGE TANK (S):
(PER ATTACHED LIST OR LIST HERE)
FOR TAKING CORRECTIVE ACTION AND COMPENSATING THIRD PARTIES FOR BODILY INJURY AND PROPERTY DAMAGE CAUSED BY EITHER SUDDEN ACCIDENTAL RELEASES OR NON-SUDDEN ACCIDENTAL RELEASES OR ACCIDENTAL RELEASES, IN ACCORDANCE WITH AND SUBJECT TO THE LIMITS OF LIABILITY, EXCLUSIONS, CONDITIONS, AND OTHER TERMS OF THE POLICY ARISING FROM OPERATING THE UNDERGROUND STORAGE TANK (S) IDENTIFIED ABOVE.
THE LIMITS OF LIABILITY ARE $ ____________EACH OCCURRENCE AND $ _________ ANNUAL AGGREGATE 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 __________.
- THE INSURER FURTHER CERTIFIES THE FOLLOWING WITH RESPECT TO THE INSURANCE DESCRIBED IN PARAGRAPH 1:
- BANKRUPTCY OR INSOLVENCY OF THE INSURED SHALL NOT RELIEVE THE INSURER OF ITS OBLIGATIONS UNDER THE POLICY TO WHICH THIS CERTIFICATE APPLIES.
- THE INSURER IS LIABLE FOR THE PAYMENT OF AMOUNTS WITHIN ANY DEDUCTIBLE APPLICABLE TO THE POLICY TO THE PROVIDER OF CORRECTIVE ACTION OF A DAMAGED THIRD-PARTY, WITH A RIGHT OF REIMBURSEMENT BY THE INSURED FOR ANY SUCH PAYMENT MADE BY THE INSURER. THIS PROVISION DOES NOT APPLY WITH RESPECT TO THAT AMOUNT OF ANY DEDUCTIBLE FOR WHICH COVERAGE IS DEMONSTRATED UNDER ANOTHER MECHANISM OF COMBINATION OF MECHANISM AS SPECIFIED IN 40 CFR 180.95-280.102.
- WHENEVER REQUESTED BY THE DIRECTOR OF AN IMPLEMENTING AGENCY, THE INSURER AGREES TO FURNISH TO THE DIRECTOR A SIGNED DUPLICATE ORIGINAL OF THE POLICY AND ALL ENDORSEMENTS.
- CANCELLATION OF ANY OTHER TERMINATION OF THE INSURANCE BY THE INSURER, 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.
- THE INSURANCE COVERS CLAIMS OTHERWISE COVERED BY THE POLICY THAT ARE REPORTED TO THE INSURER WITHIN SIX MONTHS OF THE EFFECTIVE DATE OF CANCELLATION OF NON-RENEWAL OF THE POLICY EXCEPT WHERE THE NEW OR RENEWED POLICY HAS THE SAME 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 IS LICENSED TO TRANSACT THE BUSINESS OF INSURANCE, OR ELIGIBLE TO PROVIDE INSURANCE AS AN EXCESS OR SURPLUS INSURER, IN ONE OR MORE STATES.
[Signature of authorized representative of Insurer]
[Name of Insurance Representative]
[Title]
[Address of Insurance Representative]
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