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Financial Responsibility for Underground Storage Tanks

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 Storage Tank Division (STD) 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. TJ Richardson at 517-285-6803, or e-mail at


Rule Citations : The FR requirements are cited in  Rule 61, Section 280.90, of the Michigan Underground Storage Tank Rules (MUSTR), 2008 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 TJ Richardson at 517-285-6803, or e-mail at



Name: [name of each covered location]


Address: [address of each covered location]


Policy Number:


Endorsement (if applicable):


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 UST(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 1 instrument is used to assure different tanks at any 1 facility, for each tank covered by this instrument, list the tank identification number provided in the notification submitted pursuant to 40 C.F.R. part 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 releases" 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 UST(s) identified above.

            The limits of liability are [insert the dollar amount of the "each 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 USTs or locations, indicate the amount of coverage for each type of coverage and/or for each UST or location], exclusive of the 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 certificate applies.

            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 ["Insured" or "Group"].  This provision does not apply with respect to that amount of any deductible for which coverage is demonstrated under another mechanism or combination of mechanisms as specified in 40 C.F.R. parts 280.95 to 280.102.

            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 not-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 6 months of the effective date of cancellation or 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 C.F.R. part 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 1 or more states"].


[Signature of authorized representative of Insurer]

[Type Name]

[Title], Authorized Representative of [name of Insurer or Risk Retention Group]

[Address of Representative]