WASHINGTON -- In what will be a major blow to marketers, a large insurer of underground tanks in the United States will no longer issue new underground storage tank (UST) insurance or renew existing coverage, CSP Daily News has learned.
A top U.S. Environmental Protection Agency (EPA) official delivered the news of the decision by Zurich American Insurance to quit the market in a June 18 memo to industry groups and state tank fund administrators, a Raymond James/CSP Daily News Flash reported late yesterday.
"Because Zurich has been one of the major national UST insurance providers over the years, EPA is aware that many UST owners and operators across the United States have used Zurich's UST insurance policies to provide coverage against corrective actions and third-party damages," wrote Carolyn Hoskinson, director of the agency' Office of USTs.
The EPA memo, a copy of which has been obtained by CSP Daily News, gives no reason for Schaumburg, Ill.-based Zurich American's decision to quit the market.
"I assume it's because their claims are exceeding premium revenues," said one marketer attorney with several clients who are currently insured by Zurich. "A lot of people depend on Zurich. I think we're entering a period where it will be tougher for folks to get tank insurance. "
The problems for marketers will be compounded by the sorry financial situation of many state tank funds. Legislators have raided funds to ease state budget squeezes and some funds are on the verge of extinction. EPA regulations require that fuel marketers and tank-owners have insurance or can provide proof of their ability to pay for leak cleanups if a spill occurs.
"If you're one of them, and you are now converting to a new policy, now would be a great time to read it carefully and ensure you have the coverage that you need," Hoskinson said.