Financial Responsibility (UST)

Financial responsibility is a federal requirement under 40 CFR Part 280 Subpart H that mandates UST owners and operators demonstrate they have the financial resources to pay for corrective action (cleanup) and compensate third parties for bodily injury and property damage caused by releases. This requirement ensures that cleanup costs don't fall on taxpayers.

Acceptable mechanisms for demonstrating financial responsibility include commercial environmental liability insurance, state assurance funds, self-insurance (for entities meeting specific net worth thresholds), surety bonds, letters of credit, trust funds, and corporate guarantees. Most small UST owners rely on insurance or state fund coverage.

The required coverage amounts are $1 million per occurrence for corrective action and $1 million per occurrence for third-party liability for owners of 1-100 petroleum USTs. Owners of 101+ USTs must demonstrate $2 million per occurrence. Failure to maintain financial responsibility can result in enforcement actions and personal liability for cleanup costs.