Financial Responsibilities for Your Underground Storage Tank

Written by: Patrick Rounds, President and CEO 

Federal regulations require owners or operators (O/O) of petroleum USTs to demonstrate financial responsibility by taking corrective action and compensating third parties for bodily injury and property damage caused by accidental releases arising from tank operation. Most O/Os must provide $1 million in coverage per occurrence. If the O/O owns or operates 101 or more tanks, they must also maintain $2 million aggregate coverage to address the possibility of occurrences from multiple tanks.

Financial responsibility must address sudden and non-sudden releases and must be maintained until all USTs are permanently closed. Nationally, the average cost of responding to a release is approximately $150,000, although many claims exceed $1 million. If you don’t have good coverage, you could lose your business!

There are several options available to comply with the financial responsibility requirements, but most private businesses rely on state funds (in 36 states) private insurance, or self-insurance (if you have a tangible net worth of at least $10 million, or $20 million if you own 101 or more tanks). In 14 states and DC where there is no state fund, private insurance is the only viable option for most O/Os.

Private insurance policies have application, operation, and reporting requirements. As the O/O you have to comply with the policy terms and requirements  or you may not have coverage when you need it most.

PMMIC is the only insurer who ensures your application is accurate and complete, and who inspects its customer’s facilities every year to ensure the operational requirements are satisfied.  That’s coverage you can count on.