Texas Petroleum Storage Tanks Full CEI #5 Financial Assurance Checklist

The Petroleum Storage Tanks Full CEI #5 Financial Assurance Checklist app is a useful app for inspectors, operators, and petroleum storage companies or facilities to provide assurance to the state of Texas that a contingency plan is in place for mitigating financial costs and reducing third-party liability or state liability for issues such as leaking underground storage tanks, failing secondary containment and more. Financial assurance relates to specific financial instruments provided by an entity to ensure timely environmental cleanup should an owner or operator be unable or unwilling to perform required environmental actions. Businesses or individuals that obtain a permit or registration requiring financial assurance are responsible for obtaining and maintaining a financial assurance mechanism in compliance with rules and regulations. The types of financial assurance mechanisms available and required language for each are set out by the Texas Commission on Environmental Quality and other sub-agencies. Although these mechanisms have names that are commonly used within the financial industry, their format and language are different. For example, a certificate of insurance as set out in agency rules is not the same as an ACORD Form certificate of insurance routinely used in the insurance industry. Some of the types of financial assurance instruments this app covers include self-insurance, guarantees, insurance or Risk Retention Group Coverage, a surety bond, a letter of credit, a trust fund, and more.

The amount of financial assurance is often determined by the requirements of specific operators, as well as local programs and local regulations. This app is helpful for operators who are being subjected to inspections concerning their financial viability and the evaluation of a contingency plan for financing environmental clean-up.

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