6 Colo. Code Regs. § 1007-3-266.16
Current through Register Vol. 48, No. 1, January 10, 2025
Section 6 CCR 1007-3-266.16 - Liability Requirements(a)Coverage for Sudden Accidental Occurrences.An owner or operator of a hazardous waste treatment, storage, or disposal facility, or a group of such facilities, must demonstrate financial responsibility for bodily injury and property damage to third parties caused by sudden accidental occurrences arising from operations of the facility or group of facilities. The owner or operator must have and maintain liability coverage for sudden accidental occurrences in the amount of at least $1 million per occurrence with an annual aggregate of at least $2 million, exclusive of legal defense costs. This liability coverage may be demonstrated as specified in subsections (f), (g), (h), (i), (j), (k), and (l) of this section.
(b)Coverage for Non-sudden Accidental Occurrences.An owner or operator of a surface impoundment, landfill, or land treatment facility, or disposal miscellaneous unit which is used to manage hazardous waste, or a group of such facilities, must demonstrate financial responsibility for bodily injury and property damage to third parties caused by nonsudden accidental occurrences arising from operations of the facility or group of facilities. The owner or operator must have and maintain liability coverage for nonsudden accidental occurrences in the amount of at least $3 million per occurrence with an annual aggregate of at least $6 million, exclusive of legal defense costs. An owner or operator who must meet the requirements of this section may combine the required per-occurrence coverage levels for sudden and nonsudden accidental occurrences into a single per-occurrence level, and combine the required annual aggregate coverage levels for sudden and nonsudden accidental occurrences into a single annual aggregate level. Owners or operators who combine coverage levels for sudden and nonsudden accidental occurrences must maintain liability coverage in the amount of at least $4 million per occurrence and $8 million annual aggregate. This liability coverage may be demonstrated as specified in subsections (f), (g), (h), (i), (j), (k), and (l) of this section.
(c)Request for Variance.If an owner or operator can demonstrate to the satisfaction of the Department that the levels of financial responsibility required by paragraphs (a) or (b) of this section are not consistent with the degree and duration of risk associated with treatment, storage or disposal at the facility or group of facilities, the owner or operator may obtain a variance from the Department. The request for a variance must be submitted to the Department as part of the application under§ 100.61 of these regulations for a facility that does not have a permit, or pursuant to the procedures for permit modification under§ 100.61 of these regulations for a facility that has a permit. If granted, the variance will take the form of an adjusted level of required liability coverage, such level to be based on the Department's assessment of the degree and duration of risk associated with the ownership or operation of the facility or group of facilities. The Department may require an owner or operator who requests a variance to provide such technical and engineering information as is deemed necessary by the Department to determine a level of financial responsibility other than that required by paragraph (a) or (b) of this section. Any request for a variance for a permitted facility will be treated as a request for a permit modification under§ 100.61 of these regulations.
(d)Upward Adjustments by the Department.If the Department determines that the levels of financial responsibility required by paragraph (a) or (b) of this section are not adequate based on the degree and duration of risk associated with treatment, storage, or disposal at the facility or group of facilities, the Department may adjust the level of financial responsibility required under paragraph (a) or (b) of this section as may be necessary to protect human health and the environment. This adjusted level will be based on the Department's assessment of the degree and duration of risk associated with the ownership or operation of the facility or group of facilities. In addition, if the Department determines that there is a significant risk to human health and the environment from non-sudden accidental occurrences resulting from the operations of a facility that is not a surface impoundment, landfill, or land treatment facility, the Department may require that the owner or operator of the facility comply with paragraph (b) of this section. An owner or operator must furnish to the Department within a reasonable time, any information which the Department requests to determine whether cause exists for such adjustments of level or type of coverage. Any adjustment of the level or type of coverage for a permitted facility will be treated as a request for a permit modification under§ 100.61 of these regulations.
(e)Period of Coverage.Within 60 days after receiving certifications from the owner or operator and an independent registered professional engineer that final closure has been completed in accordance with the approved closure plan, the Department will notify the owner or operator in writing that he/she is no longer required by this section to maintain liability coverage for that facility, unless the Department has reason to believe that closure has not been in accordance with the approved closure plan.
(h)Insurance for liability coverage.(1) An owner or operator may demonstrate the required liability coverage by having liability insurance as specified in this subsection.(2) Each insurance policy must be evidenced by a Certificate of Liability Insurance. The wording of the certificate of insurance must be identical to the wording specified in§ 266.18(h). The owner or operator must submit a signed duplicate original of the certificate of insurance to the Department. If requested by the Department, the owner or operator must provide a signed duplicate of the insurance policy. An owner or operator of a new facility must submit the signed duplicate original of the Certificate of Liability Insurance to the Department at least 60 days before the date on which hazardous waste is first received for treatment, storage, or disposal. The insurance must be effective before this initial receipt of hazardous waste.(3) Insurance for liability coverage must meet the requirements specified in§ 266.14(h)(2)-(5).(4) The insurance afforded with respect to such occurrences is subject to all of the terms and conditions of the policy; provided, however, that any provisions of the policy inconsistent with subsections (i) through (v) of this Paragraph (4) are amended to conform with subsections (i) through (v);(i) Bankruptcy or insolvency of the insured shall not relieve the Insurer of its obligations under the policy.(ii) The Insurer is liable for the payment of amounts within any deductible applicable to the policy, with a right of reimbursement by the insured for any such payments made by the Insurer.(iii) Whenever requested by the Department, the Insurer agrees to furnish to the Department a signed duplicate original of the policy. (iv) Cancellation of the insurance policy whether by the Insurer or the insured, a parent corporation providing insurance coverage for its subsidiary, or by a firm having an insurable interest in and obtaining liability insurance on behalf of the owner or operator of the hazardous waste management facility, will be effective only upon written notice and only after the expiration of sixty (60) days after a copy of such written notice is received by the Department.(v) Any other termination of the insurance policy will be effective only upon written notice and only after the expiration of thirty (30) days after a copy of such written notice is received by the Department. (5) Each insurance policy must be issued by an insurer which, at a minimum, is licensed to transact the business of insurance, or be eligible to provide insurance as an excess or surplus lines insurer, in one or more states and comply with Title 10 C.R.S. 1987, as amended.(i)Letter of credit for liability coverage.(1) An owner or operator may satisfy the requirements of this section by obtaining an irrevocable standby letter of credit that conforms to the requirements of this subsection and submitting a copy of the letter of credit to the Department. An owner or operator of a new facility must submit a copy of the letter of credit to the Department at least 60 days before the date on which hazardous waste is first received for treatment, storage, or disposal. The letter of credit must be effective before this initial receipt of hazardous waste.(2) The financial institution issuing the letter of credit must be an entity that has the authority to issue letters of credit and whose letter of credit operations are regulated and examined by a Federal or State agency.(3) The wording of the letter of credit must be identical to the wording specified in§ 266.18(l) of this part.(4) An owner or operator who uses a letter of credit to satisfy the requirements of this section may also establish a standby trust fund. Under the terms of such a letter of credit, all amounts paid pursuant to a draft by the trustee of the standby trust will be deposited by the issuing institution into the standby trust in accordance with instructions from the trustee. The trustee of the standby trust fund must be an entity which has the authority to act as a trustee and whose trust operations are regulated and examined by a Federal or State agency.(5) The wording of the standby trust fund must be identical to the wording specified in§ 266.18(n).(j)Surety bond for liability coverage.(1) An owner or operator may satisfy the requirements of this section by obtaining a surety bond that conforms to the requirements of this subsection and submitting a copy of the bond to the Department. An owner or operator of a new facility must submit a copy of the bond to the Department at least 60 days before the date on which hazardous waste is first received for treatment, storage, or disposal. The bond must be effective before this initial receipt of hazardous waste.(2) The surety company issuing the bond must be among those listed as acceptable sureties on Federal bonds in the most recent Circular 570 of the U.S. Department of Treasury.(3) The wording of the surety bond must be identical to the wording specified in§ 266.18(m) of this part.(4) A surety bond may be used to satisfy the requirements of this section only if the Attorneys General or Insurance Commissioners of (i) the State in which the surety is incorporated, and (ii) each State in which a facility covered by the surety bond is located have submitted a written statement to EPA that a surety bond executed as described in this§ 266.18(m) of this part is a legally valid and enforceable obligation in that State.(k)Trust fund for liability coverage.(1) An owner or operator may satisfy the requirements of this section by establishing a trust fund that conforms to the requirements of this subsection and submitting an originally signed duplicate of the trust agreement to the Department. An owner or operator of a new facility must submit a copy of the trust agreement to the Department at least 60 days before the date on which hazardous waste is first received for treatment, storage, or disposal. The trust agreement must be effective before this initial receipt of hazardous waste.(2) The trustee must be an entity which has the authority to act as a trustee and whose trust operations are regulated and examined by a Federal or State agency.(3) The trust fund for liability coverage must be funded for the full amount of the liability coverage to be provided by the trust fund before it may be relied upon to satisfy the requirements of this section. If at any time after the trust fund is created the amount of funds in the trust fund is reduced below the full amount of the liability coverage to be provided, the owner or operator, by the anniversary date of the establishment of the fund, must either add sufficient funds to the trust fund to cause its value to equal the full amount of liability coverage to be provided, or obtain other financial assurance as specified in this section to cover the difference. For purposes of this paragraph, "the full amount of the liability coverage to be provided" means the amount of coverage for sudden and/or nonsudden occurrences required to be provided by the owner or operator by this section, less the amount of financial assurance for liability coverage that is being provided by other financial assurance mechanisms being used to demonstrate financial assurance by the owner or operator.(4) The wording of the trust agreement must be identical to the wording specified in§ 266.18(n) of this part.(l) An owner or operator may demonstrate the required liability coverage through use of combinations of insurance, the financial test, guarantee, letter of credit, surety bond, and trust fund as these mechanisms are specified in this section, except that the owner or operator may not combine a financial test covering part of the liability coverage requirement with a guarantee unless the financial statement of the owner or operator is not consolidated with the financial statement of the guarantor. The amounts of coverage demonstrated must total at least the minimum amounts required by this section. If the owner or operator demonstrates the required coverage through the use of a combination of financial assurances under this paragraph, the owner or operator shall specify at least one such assurance as "primary" coverage and shall specify other assurance as "excess" coverage.(m) An owner or operator shall notify the Department in writing within 30 days whenever:(1) A claim results in a reduction in the amount of financial assurance for liability coverage under this section provided by a financial instrument authorized in subsections (f) through (1) of this section; or(2) A certification of Valid Claim for bodily injury or property damages caused by a sudden or nonsudden accidental occurrence arising from the operation of a hazardous waste treatment, storage, or disposal facility is entered between the owner or operator and third party claimant for liability coverage under subsection (f) through (l) of this section; or(3) A final court order establishing a judgment for bodily injury or property damages caused by a sudden or nonsudden accidental occurrence arising from the operation of a hazardous waste treatment, storage, or disposal facility is issued against the owner or operator or an instrument that is providing financial assurance for liability coverage under subsection (f) through (l) of this section.37 CR 24, December 25, 2014, effective 3/2/201538 CR 11, June 10, 2015, effective 6/30/201539 CR 05, March 10, 2016, effective 3/30/201639 CR 11, June 10, 2016, effective 6/30/201640 CR 06, March 25, 2017, effective 4/14/201740 CR 11, June 10, 2017, effective 6/30/201740 CR 21, November 10, 2017, effective 11/30/201741 CR 06, March 25, 2018, effective 4/14/201841 CR 11, June 10, 2018, effective 6/30/201841 CR 24, December 25, 2018, effective 1/14/201942 CR 06, March 25, 2019, effective 4/14/201942 CR 06, March 25, 2019, effective 5/30/201942 CR 11, June 10, 2019, effective 6/30/201943 CR 12, June 25, 2020, effective 7/15/202044 CR 06, March 25, 2021, effective 4/14/202144 CR 11, June 10, 2021, effective 6/30/202144 CR 24, December 25, 2021, effective 1/14/202245 CR 11, June 10, 2022, effective 6/30/202245 CR 17, September 10, 2022, effective 9/10/202245 CR 17, September 10, 2022, effective 9/30/202245 CR 23, December 10, 2022, effective 1/30/2023