If you operate a marine vessel within the US Exclusive Economic Zone, having an insurance policy that offers protection against pollution risks is a legal responsibility. Federal law requires marine industries involved in the transport of hazardous materials to obtain environmental Certificates of Financial Responsibility to demonstrate the ability to pay for spills or leaks. Your liability insurance should, therefore, guarantee sufficient coverage, as required in eCOFR filings.
What to Look for in Pollution Liability Insurance
Your pollution liability policy will depend significantly on the size of your vessel and the type of hazardous cargo it carries. The limits of eCOFR should reflect adequate coverage for your specific requirements and responsibilities. The insurance firm WQIS indicates important coverage considerations for:
- Assessments of damages and losses to natural resources
- Cleanup of pollution as a result of spills, leaks and accidents
- Fines incurred from criminal charges
- Third-party revenue losses
- Accident and activity investigations
- Property damage from third-party claims
Operating a vessel with hazardous cargo carries with it a responsibility to ensure the health and safety of the marine environment. Federal regulations require operators to prove an ability to pay for possible damages before an eCOFR is issued. The penalties for noncompliance range from detainment to fines or vessel seizure or forfeit. A good pollution liability plan can protect your company from incurring significant financial and criminal damages in the course of doing business.