OFFICE OF SURFACE MINING RECLAMATION AND ENFORCEMENT

U.S. Department of the Interior

Search conducted by: Joyce Zweben Scall Page 1 of 2

COALEX STATE 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INQUIRY: An operator's permit has been revoked and the bond is in process of being 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."
OFFICE OF SURFACE MINING RECLAMATION AND ENFORCEMENT

U.S. Department of the Interior

Search conducted by: Joyce Zweben Scall Page 2 of 2

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).