News of the Week
EPA TO REQUIRE WASTE DUMP INSURANCE Responding to mounting public pressure, the Environmental Protection Agency has announced that it will require owners and operators of waste disposal sites to carry liability insurance to compensate third parties in the event of an accident. EPA officials estimate that up to 10,000 dump sites in the U.S. will be affected by this rule. This EPA requirement reverses its earlier position that such insurance mandated by the federal government is not needed. But public comment was overwhelmingly against dropping a proposed insurance requirement. In a statement, EPA Administrator Anne M. Gorsuch says, "These requirements have been asked for by state agencies, the regulated industry, and the general public. The liability coverage helps assure t h e public t h a t funds are available to provide compensation for personal injuries and damage that may be caused by accidents at hazardous waste facilities." The regulations will require operators and owners of all hazardous waste facilities to be insured or pass a test proving that the company has the financial strength to cover liability costs up to the required amounts. For so-called sudden occurrences, such as explosions, coverage must be at least $1 million per occurrence, with an annual limit of $2 million. These rules go into effect in about 90 days. For gradual or nonsudden occur-
rences, such as leaks of chemicals into groundwater, liability coverage must be $3 million per occurrence with a limit of at least $6 million annually. These rules will be phased into effect over three years, starting with the largest waste facilities. A company can avoid buying insurance if it can prove that it has the financial power to cover liability costs. If a company cannot pass the necessary financial test completely, it may use its assets to cover some of the liability and purchase insurance to make up the difference. The regulations also will detail requirements for qualifications for insurers, provide for public comments in the need for further such qualifications, eliminate procedures for allowing variances to the required levels of coverage, and include the requirement that insurers provide "first dollar" coverage, that is, no deductible. Insurers also will have to notify EPA whenever a facility's insurance is to be canceled or terminated. This issue has been hanging on for some time. The original proposals for liability insurance coverage were made during the Carter Administration, but the current Administration believed it was an issue for the states to resolve and should not involve federal rules. Another problem faced by EPA in its early studies of the problem was that almost no U.S. insurance companies offered this kind of coverage until recently.
Waste disposal sites will be required to carry adequate liability insurance 6
C&EN April 19, 1982
Now about 40 firms offer the suddenoccurrence coverage, but fewer offer the nonsudden-occurrence-type coverage. This is one of the main reasons for the three-year phase-in of the more expensive coverage. EPA officials say the new regulations will not diminish the agency's own inspection program for hazardous sites, even though it is obvious that insurance companies will be developing their own risk analysis and inspection programs. Cost of the insurance is expected to run into many thousands of dollars per year, but EPA does not think the cost will be a major factor in waste-site operating expenses. D
EPA asks controversial changes to water law A major dispute is brewing over proposed changes to the clean water law. The Environmental Protection Agency characterizes the proposal, which is still in draft form, as fine tuning the law. Environmental groups see it as a cynical attempt to undermine one of the country's best environmental laws. And at least one chemical industry spokesman believes it is a good start on amending the law. One major change in the draft legislation, which is now undergoing review by the Office of Management & Budget to determine whether its financial and regulatory impact is too onerous, would be to extend from 1984 to 1988 the current industrial compliance deadline for installation of best available control technology (BAT). EPA says this change is necessary because it has not yet issued final rules telling industry how to comply with the BAT requirement. The agency also would give itself until July 1,1984, to issue the rules. EPA apparently is also backing off on categorical p r e t r e a t m e n t standards for particular industries that would be made discretionary, rather than mandatory, under the proposed legislation. However, EPA would issue by July 1, 1984, general pretreatment standards, similar to present requirements, for industrial discharges into publicly owned treatment works.
