DEQ - Financial Responsibility for Liability Coverage

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Financial Responsibility for Liability Coverage

Agency: Environmental Quality

Financial Responsibility for Liability Coverage. Owners and operators of hazardous waste management facilities must demonstrate third-party pollution legal liability coverage. The financial mechanisms that may be used are specified in R299.9710. The wording for the financial mechanisms is specified by the WMD:

Financial Test
Corporate Guarantee for Liability Coverage
Liability Letter of Credit
Standby Trust Fund for Liability Letter of Credit (required for Liability Letter of Credit)
Liability Trust Fund

If insurance is used to demonstrate third-party pollution legal liability coverage, then the policy must be amended by an endorsement on a form specified by the WMD. Separate endorsements are required for sudden and accidental occurrences and nonsudden accidental occurrences, and special versions of the endorsements are available for policies that have been pre-accepted by the WMD. (Pre-acceptance involves the review of the policy form and all endorsements used for Michigan risks.) In addition, the owner or operator must sign a waiver of the right to immediate cancellation of the policy. The endorsements and waiver form are listed below.


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