Application of Quantitative Risk Assessment Evaluation of Underground Storage Tanks to Insurance, Banking, and Real Estate Transactions

In the 1984 Resource Conservation and Recovery Act (RCRA) amendments, Congress required the U.S. Environmental Protection Agency (EPA) to impose a minimum coverage of $1,000,000 per underground storage tank (UST) release. This requirement, as well as a minimum annual aggregate coverage of up to $6,000,000 per tank owner, is included in the proposed UST rules. Currently, there is a dearth of UST insurance available, and that which is available is generally restricted. The key to providing coverage, we believe, is a concerted risk management program with sound technical assessment as the cornerstone for underwriting. Such a program also provides a basis for sound property transactions involving underground tanks.