Commercial operators of marine vessels can face significant liability for accidents or emissions that cause pollution. Federal legislative initiatives have enhanced accountability for preventing and addressing pollution, so many operators have found it necessary to reexamine their procedures and insurance coverage. They must obtain Certificates of Financial Responsibility that have a function similar to a bond and attest to an operator’s ability to pay for cleanups.
Understanding the Aftermath of an Environmental Accident
When a vessel leaks fuel, oil, or another type of contaminant into the water, the cost of cleanup can be considerable In addition to the work required to perform the actual cleanup, extensive testing may be required to confirm the efficacy of a cleanup effort. In addition, there may be consequential damages sustained by other vessels or property owners in the area. Lastly, some types of accidents may generate a considerable fine. COFR insurance shows that a vessel operator has adequate insurance coverage to assume responsibility for these potentially high costs.
When a vessel owner needs to procure a COFR, it’s advisable to work with a carrier who has extensive experience in this area. They can provide guidance about minimum requirements as well as any additional coverage that may be needed to cover a particular type of vessel or activity.