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UST Pollution Liability Insurance

What are financial responsibility requirements?

Owners and operators of underground storage tanks (USTs) must show they have the financial resources to clean up a site if a release occurs, correct environmental damage, and compensate third parties for injury to their property or themselves.  Financial responsibility is required for all regulated petroleum UST systems and must be maintained for the life of the system.

Chapter 567-136 - Financial Responsibility for Underground Storage Tanks

How can owners and operators demonstrate financial responsibility?

There are about 40 states that offer financial assurance programs for UST owners or operators. Iowa no longer runs a financial assurance fund. Owners and operators of UST systems in Iowa may demonstrate financial responsibility through a number of options: obtain commercial or private pollution liability insurance; demonstrate self-insurance; obtain guarantees, surety bonds, or letters of credit or place the required amount into a trust fund administered by a third party. Local governments have four additional compliance mechanisms tailored to their special characteristics: a bond rating test, a financial test, a guarantee, and a dedicated fund.  The Iowa DNR does not accept the ACORD Certificate as proof of financial responsibility. A Certificate of Insurance is required by Iowa Administrative Code (IAC) Chapter 567-136.8 and here is a Certificate of Insurance Example.

What are the required coverage amounts?

The UST regulations identify several groups of UST owners and operators and the required coverage amounts for each group. This table presents each group and its required coverage amount.

Group of UST Owners  Per Occurrence Coverage Aggregate Coverage
 Marketers with 1 - 100 tanks $1 million $1 million
 Marketers > 100 tanks $1 million $2 million

 Non-Marketers < 10,000 gal / mo, 1 - 100 tanks

$500,000 $1 million
 Non-Marketers < 10,000 gal / mo, > 100 tanks $500,000 $2 million
 Non-Marketers > 10,000 gal / mo, 1 - 100 tanks $1 million $1 million
 Non-Marketers > 10,000 gal / mo, > 100 tanks $1 million $2 million

What is the cost of demonstrating financial responsibility?

The cost of obtaining financial responsibility depends upon the mechanism used and in some cases (such as insurance) can also depend upon the type of UST system (such as single vs. double-walled tanks, older vs. newer systems).   Private insurance is the most common mechanisms used to comply with financial responsibility requirements in Iowa.  Private insurance premiums for a pressurized UST system range roughly $350 to $400 per tank for newer tanks with secondary containment, and $600 to $750 per tank for older tanks. Here is a list of insurance providers who are able to help you comply with financial responsibility requirements by providing a suitable insurance mechanism.

When must I demonstrate financial responsibility?

You must demonstrate financial responsibility before you operate your UST system, and when ownership changes occur.  Insurance must be renewed annually. A copy of the mechanism you use for financial responsibility will be requested at the time you receive your annual tank tag management fee application, which is usually in November.

Obtaining Insurance For Aging USTs - message and resources from EPA