One of the largest insurers of underground storage tanks (USTs) in the U.S. is pulling out of the market. According to an EPA memo, Zurich has decided that it will no longer issue new UST insurance or renew existing policies. EPA issued the memo in order to warn consumers and state UST trust fund administrators of Zurich's upcoming exit from the market.
EPA regulations require that fuel marketers and tank owners have insurance or can provide proof of their ability to pay for cleanups if a spill occurs from an UST. EPA believes that we are again heading into a market where UST coverage will be hard to find -- the same type of market that spurred many states to begin storage tank trust funds, which essentially took the place of private insurance coverage. Unfortunately, many of those state funds are in poor financial shape, in part because the insurance market had improved significantly.
Alabama still has an excellent -- and mandatory -- UST trust fund program, and most tank owners in the state rely on it exclusively. However, cleanups are frequently extremely slow, and the required documentation and approval process can, on occasion, be somewhat torturous. In addition, there are circumstances in which owners can lose trust fund coverage by failing to comply with testing and reporting requirements. Consequently, a good number of tank owners may wish to consider insuring over the trust fund coverage. Zurich's exit from the market will make that more difficult.
EPA's excellent memo, which includes links to other helpful resources (including EPA's List Of Known Insurance Providers For Underground Storage Tank Owners And Operators) can be found here.
