Pollution insurance required in U.S. waters

Jul 25, 2022 by Capt. Jake DesVergers

Operating yachts in U.S. waters requires compliance with a number of laws, regulations, and codes. Many of these requirements are met through various means, including vessel design, insurance, specific contractors, approved manuals, and safe operations. Applicability of these obligations can change depending upon the size of the yacht and where it cruises.

The Clean Water Act, as amended by the Oil Pollution Act of 1990, provides the basic statutory authority for pollution prevention, contingency planning, and response activities for oil and hazardous substances. Enforcement covers all U.S. waters and extends to the 200-mile Exclusive Economic Zone.

For insurance, every yacht operating in U.S. waters must have some type of liability coverage for potential water pollution. Starting at 300 gross tons, yachts must prove that financial protection by obtaining a Certificate of Financial Responsibility (COFR) from the U.S. Coast Guard (USCG). The fees collected as part of this regulation are used for removal costs, payment of claims, research and development, and other specific appropriations.

In addition, for those yachts over 300 gross tons, the International Convention on the Removal of Wrecks requires proof of insurance coverage. It makes the registered owner of a yacht liable for locating, marking, and removing a wreck deemed to be a hazard in a particular country’s area.

For yachts over 400 gross tons, a vessel-specific Nontank Vessel Response Plan (NTVRP) must be reviewed and approved by the USCG. As part of the NTVRP, each yacht is assigned a Qualified Individual for emergency response, oil spill drills are conducted on board, and contracts are established with an oil spill response organization (OSRO) and salvage/marine firefighting (SMFF) company. In some states, such as California and Alaska, there are additional requirements for operating in their waters. For yachts over 1,000 gross tons, the International Convention on Civil Liability for Bunker Oil requires insurance or other financial security, such as the guarantee of a bank or similar institution, to cover the liability of the registered owner for pollution damage in an amount equal to the limits of liability. These types of plans are normally in the millions of dollars.

CAPT. JAKE DESVERGERS IS CHIEF SURVEYOR FOR INTERNATIONAL YACHT BUREAU (IYB), WHICH PROVIDES FLAG STATE INSPECTION SERVICES TO YACHTS ON BEHALF OF SEVERAL FLAG STATE ADMINISTRATIONS.

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