Environmental Financial Assurance After COVID-19

Introduction

Financial assurance (FA) requirements are a common feature of many environmental programs. Parties remediating contaminated sites, or engaging in certain operations involving hazardous substances, must often demonstrate that they have the long-term resources and short-term cash flow to meet their obligations. While FA requirements can sometimes be satisfied by a showing that the obligated party or parties, or their affiliates, have the financial strength to guaranty the obligations themselves, often third-party instruments like bonds or letters of credit are required. Federal and state regulators impose these financial assurance requirements to ensure that, if potentially responsible parties (PRPs) or site owner/operators become unwilling or unable to perform, private funds are readily available for environmental regulators to complete any required remediation. The goal is to preserve public resources for sites and remediation projects where there are