COALEX REPORT 243

	Coalex Report 243

This is the Office of Surface Mining's library of COALEX Research Reports. COALEX is a database of mining and reclamation information, including the Surface Mining Law and regulations, maintained in LEXIS-NEXIS -- a commercial, on-line research service. These reports have been compiled under a cooperative agreement between the Office of Surface Mining and the Interstate Mining Compact Commission, which represents most U.S. coal producing states. The following report includes an analysis of a specific issue requested by a state regulatory authority with responsibility for carrying out the Surface Mining Law. Copies of the research reports and attachments are available to the public, upon request. For additional information, or to obtain copies of the listed attachments, contact Ron Tarquinio by phone at (202) 208-2882 or by e-mail at rtarquin@osmre.gov.

                   

COALEXState Inquiry Report - 243
January, 1993

Olga Brunning, Esquire
Department of Natural Resources
Tawes Building
580 Taylor Avenue, Room C-4
Annapolis, Maryland 21401

TOPIC: LIABILITY INSURANCE COVERAGE

INQUIRY: An operator's permit has been revoked and the bond is in process of being revoked
(the regulatory authority is negotiating with the surety to determine if they will pay or reclaim).
The owner of the property wants to know who is liable if there is an accident on the formerly
permitted area. Please locate any material that discusses liability insurance coverage between the
time a permit is revoked and the bond is forfeited, and reclamation is performed by the surety or
the state (this assumes that the company performing the reclamation obtains proper insurance
coverage). 

SEARCH RESULTS: Research was conducted using the COALEX Library and other materials
available in LEXIS, as well as discussions with a state and a federal staff attorney. No materials
were identified that discuss what happens to liability insurance coverage when permits are
revoked and bonds forfeited. It is the opinion of the attorneys canvassed that the permittee
remains liable for accidents, etc. that might occur on the formerly permitted area; this opinion is
based on a reading of the following materials:

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

1. SMCRA Sec. 507(f), 30 USC 1257(f)
"Each applicant for a permit shall be required to submit to the regulatory authority as part of the
permit application a certificate issued by an insurance company authorized to do business in the
United States certifying that the applicant has a public liability insurance policy in force for the
surface mining and reclamation operations for which such permit is sought.... Such policy shall
provide for personal injury and property damage protection in an amount adequate to
compensate any persons damaged as a result of surface coal mining and reclamation
operations...and entitled to compensation under the applicable provisions of State law. Such
policy shall be maintained in full force and effect during the terms of the permit or any renewal,
including the length of all reclamation operations."


2.  54 FR 13814 (APRIL 5, 1989). Final rule. 
   30 CFR 800.60 Terms and conditions for liability insurance
 "(b) The policy shall be maintained in full force during the life of the permit or any renewal
thereof and the liability period necessary to complete all reclamation operations under this
Chapter."

   OSM is "amending 800.60(b) of the permanent program regulations to state that the liability
insurance policy shall be maintained in full force during the life of the permit or any renewal
thereof and the liability period necessary to complete all reclamation operations. This change
clarifies that the liability period extends through the completion of reclamation regardless of
whether the permit was renewed for authorization to conduct section 701(28) activities."


3. 800.50 Forfeiture of bonds.
"(d)(1) In the event the estimated amount forfeited is insufficient to pay for the full cost of
reclamation, the operator shall be liable for remaining costs. The regulatory authority may
complete, or authorize completion of, reclamation of the bonded area and may recover from the
operator all costs of reclamation in excess of the amount forfeited."


4. NATIONAL WILDLIFE FEDERATION, et al. v LUJAN, 31 ERC (BNA) 2069, 21 ELR 20143, 1990
US Dist LEXIS 11682 (D DC 1990).
IV. CONTINUOUS PERMITTING n. 15: "[T]he Secretary amended the rule at 30 C.F.R. 800.60(b)
to require that permittee must continue to carry liability insurance until it completes reclamation,
regardless of whether it renews its permit."


ATTACHMENTS
A.   SMCRA Sec. 507(f), 30 USC 1257(f)
B.   54 FR 13814 (APRIL 5, 1989). Final rule. 
C.   30 CFR 800.50 Forfeiture of bonds and 800.60 Terms and conditions for liability
     insurance.
D.   NATIONAL WILDLIFE FEDERATION, et al. v LUJAN, 31 ERC (BNA) 2069, 21 ELR 20143,
     1990 US Dist LEXIS 11682 (D DC 1990).


Research conducted by: Joyce Zweben Scall

(Home Page)

Office of Surface Mining
1951 Constitution Ave. N.W.
Washington, D.C. 20240
202-208-2719
getinfo@osmre.gov