Understanding the Importance of the Certificate of Financial Responsibility
In the past, many companies have made some substantial errors. Often, these mistakes have caused major ramifications for both the public and the environment. What’s worse, there was no accountability for a long while. However, the Oil Pollution Act of 1990 changed all that. With these new regulations, financial responsibility associated with oil and chemical spills would be assumed by the business that caused the problem. If you run a business that involves vessels transporting oil and other hazardous materials, you absolutely need to comply with OPA 90.
Complying with regulations is about a lot more than agreeing to assume responsibility. You must be issued a Certificate of Financial Responsibility in order to guarantee you understand your role in the agreement. If your business operates within the Exclusive Economic Zone of the US and involves vessels that are greater than 300 tons, you are required by law to acquire a COFR. Failing to do so can lead to massive legal and financial consequences. Ships exempt from a COFR include:
- Vessels less than 300 tons
- Vessels not involved with transshipping oil
- Vessels operating outside the EEZ
By understanding federal and local regulations dictating your industry, you can do your part to protect your business from any possible problem on the horizon. Learn more about obtaining a COFR and see what additional steps you must take to keep your company compliant.