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            Oil Pollution

               Congress passed the Oil Pollution Act of 1990 after the Exxon Valdez Spill. The law imposes liability upon vessel owners for oil spills, actual or threatened, irrespective of fault. The law also imposes requirements upon owners and operators of certain vessels to evidence their financial ability to respond in the event of a pollution incident.

                   Under OPA, the United States Coast Guard may assume control of any clean up response it deems inadequate and pass the costs it incurred back to the owner or operator of the vessel. Even where the vessel owner is permitted to conduct its own clean up, the vessel owner remains liable under OPA for the following items:

Hazardous Substances  

          While all vessels with hydraulic, fuel and/or lubricating oil(s) aboard face potential liability under OPA, vessel owners also carrying hazardous substances aboard their vessels face liability under the Comprehensive Environmental Response and Compensation Liability Act, more commonly known as “CERCLA.”

 Under CERCLA, vessel owners are liable for clean up costs and damages arising from the release or threat of a release of hazardous substances pursuant to 42 U.S.C. § 9607(a)(1). Liability is also imposed upon vessel owners for costs of conducting health effects studies to assess the impact of a hazardous substance spill. Vessel owners and operators also face liability for a contribution action under 42 U.S.C. § 9613(f) in the event their vessel causes a third party to release a hazardous substance.

Other Pollutants

                                  While OPA defines liabilities for a discharge of oil, and CERCLA defines liabilities for a discharge of hazardous substances, actual or threatened, other laws may impose liability upon vessel owners for pollution arising from substances other than oil or CERCLA defined hazardous substances.   Such liabilities may arise under both federal and state law.

State Liabilities

                          Although it is impractical to review the pollution statutes of all fifty states on this web site, the fact that liability may also be imposed pursuant to state law for a pollution incident cannot be ignored. Both OPA and CERCLA explicitly preserve the rights of states to pass their own laws governing liabilities for oil and hazardous substance spills. If you have concerns about state law liabilities due to ownership or operation of a vessel in a particular geographic area, ask about the availability of an endorsement extending coverage for state liabilities broader than OPA and CERCLA.

COFRs  - Financial Responsibility Regulatory Requirements

            Under OPA, operators of vessels with “oil” aboard, must evidence financial ability to respond up to certain statutorily defined limits. At a bare minimum, a vessel required to carry a Certificate of Financial Responsibility (COFR) aboard must be able to respond to an $800,000.00 pollution claim.

            The “COFR” required to be carried aboard a vessel is actually a document issued by the U.S. Coast Guard. The operator must complete a USCG 5585 Application Form, pay an application fee, and satisfactorily evidence their financial responsibility.

            The COFR is to be carried aboard the vessel in order for it to legally operate in US waters. Failure to have a COFR could result in detention and delay of a vessel by the USCG as well as imposition of substantial fines.

                          The methods by which one can evidence financial responsibility are listed in 33 USC § 2716, but purchasing insurance from a company like EPG is by far the most common method of compliance.As long as satisfactory evidence of financial responsibility is maintained, the COFR is good for three years from its date of issuance.

                           To obtain an application or to find out more about COFRs, we suggest that you visit the National Pollution Funds Center website.