Financial Assurance for the State of California - Safeguarding Your Clients’ Financial Security
As you work to protect your clients against environmental hazards, it is important to consider not only what the product is, but also who is offering the coverage.
What is Financial Assurance?
Financial assurance is proof of financial security (cash and non-cash) to guarantee the responsible party can cover the cost of complying with environmental objectives.
Those working with the Department of Toxic Substances Control (DTSC) are required by statute and regulation to provide adequate financial resources to pay for the long-term operation of certain types of cleanup systems. DTSC requires financial assurance for projects where a long-term cleanup system is essential to maintain environmental and human safety. Having a financial assurance mechanism in place ensures that DTSC can take over the management and stewardship of a cleanup in case the operator fails to meet its obligation due to financial insolvency or other reasons. Consider this example:
A facility was required to perform routine sampling to ensure long-term efficacy and human safety for a hazardous waste project. However, due to financial concerns, the facility was unable to adequately uphold its’ operations and was forced to cease the project. Luckily, under DTSC statute, the facility was required to have a financial assurance mechanism in place. As a result, the costly expenses associated with the projects closure obligations were covered. With financial assurance, DTSC can ensure that human health and the environment are protected without placing a burden upon California taxpayers.
Did you know? Great American E&S Insurance Company has been scheduled on the California Department of Insurance's List of Approved Surplus Line Insurers (LASLI).
Additional examples where Financial Assurance may be required include, but are not limited to:
- Vapor barriers
- Sub-slab depressurization systems
- Certain types of in-situ treatment
- Certain types of engineered caps
- Systems that have an option for conversion from passive to active cleanup
- Systems that require routine sampling to ensure long-term efficacy and effectiveness
Who can offer Financial Assurance in California?
Only carriers who are pre-approved by California DTSC for use by surplus line brokers can offer financial assurance. You can find out which carriers are approved on the CA DTSC through the following financial assurance websites:
- ww.dtsc.ca.gov/financial-assurance-and-responsibility
- www.dtsc.ca.gov/financial-assurance-quick-reference-guide/
It is important you are working with a pre-approved surplus line carrier! Great American Environmental is pre-approved by the California Insurance Code (CIC), meets their rigorous standards and is able to satisfy CA DTSC Financial Assurance requirements, including issuance of Certificates of Liability for:
- Hazardous Waste Facilities
- Closure and/or Post-Closure obligations
- Operations and Maintenance
As a pre-approved surplus lines carrier in the state of California, we’d be honored to help meet your clients’ needs.
Visit our website to learn more about Financial Assurance and how we can help you best service your clients!
Rick Ringenwald
Rick is a Divisional Vice President with Great American Environmental Division. He joins Great American from his previous position as Executive Vice President and Regional Team Leader for a leading global advisory, broking and solutions company, where he directed all environmental brokerage and business development efforts in the Northeast and Atlantic regions. With 20 years of industry knowledge, Rick brings valuable underwriting skills and a unique environmental perspective to the division. He is based out of our Exton office.