SECTION 37.9059. Financial Assurance Requirements for Liability

(a) Owners or operators required to demonstrate financial assurance for liability must comply with Subchapters A, E, F, and G of this chapter (relating to General Financial Assurance Requirements; Financial Assurance Requirements for Liability Coverage; Financial Assurance Mechanisms for Liability; and Wording of the Mechanisms for Liability).

(b) An owner or operator subject to this section must demonstrate financial assurance for bodily injury and property damage to third parties caused by sudden accidental occurrences arising from operations of the compact waste disposal facility and/or federal facility waste disposal facility. The owner or operator must have and maintain liability coverage for sudden accidental occurrences in the amount of at least $1 million per occurrence with an annual aggregate of at least $2 million, exclusive of legal defense costs.

(c) An owner or operator subject to this section must demonstrate financial assurance for bodily injury and property damage to third parties caused by non-sudden accidental occurrences arising from operations of the compact waste disposal facility and/or federal facility waste disposal facility. An owner or operator must have and maintain liability coverage for non-sudden accidental occurrences in the amount of at least $3 million per occurrence with an annual aggregate of at least $6 million, exclusive of legal defense costs.

(d) Owners or operators who must meet the requirements of this section may combine the required per-occurrence coverage levels for sudden and non-sudden accidental occurrences into a single per-occurrence level, and combine the required annual aggregate coverage levels for sudden and non-sudden accidental occurrences into a single annual aggregate level. Owners or operators who combine coverage levels for sudden and non-sudden accidental occurrences must maintain liability coverage in the amount of at least $4 million per occurrence and $8 million annual aggregate.

(e) Owners or operators subject to this subchapter may use any of the mechanisms specified in Subchapter F of this chapter except for the Financial Test for Liability and the Corporate Guarantee for Liability to demonstrate financial assurance for sudden and for non-sudden liability.

(f) Owners or operators required to provide liability coverage may not use a claims-made insurance policy as security unless the applicant places in escrow, as provided by the executive director, an amount sufficient to pay an additional year of premiums for renewal of the policy by the state on notice of termination of coverage. The escrow account must be funded at the same time the insurance policy becomes effective.

(g) The required limits of coverage in this subsection are distinct from any other liability requirements under this chapter.

Source Note: The provisions of this §37.9059 adopted to be effective January 8, 2004, 29 TexReg 101