Hazardous waste treatment, storage and disposal facilities must show they can pay third parties who are hurt or whose property is damaged by an accidental release. One way is a surety bond in the wording fixed by 40 CFR 264.151(l). The surety pays valid claims up to per-occurrence and annual aggregate limits set by 40 CFR 264.147 and 265.147.
| Title / common name | Surety bond for liability coverage — third-party bodily injury and property damage from sudden and/or nonsudden accidental occurrences, 40 CFR 264.151(l) The prescribed instrument is headed “Payment Bond”. It is used under § 264.147(i) (permitted facilities) and § 265.147(i) (interim-status facilities). Do not confuse it with the closure and post-closure financial guarantee bond in § 264.151(b). |
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| Bond type | Commercial — environmental financial responsibility (RCRA Subtitle C liability coverage) |
| Industry / license category | Environmental / hazardous waste facilities (third-party liability) |
| Jurisdiction | United States (federal) → U.S. EPA → RCRA hazardous waste rules, 40 CFR 264.147 and 265.147 (subpart H) |
| Obligee / beneficiary | No named obligee. The surety agrees with the principal to pay valid third-party claims for bodily injury and property damage; a copy of the bond is submitted to the EPA Regional Administrator The bond text: an “agreement between the Surety(ies) and the Principal” under which the sureties “agree to be responsible for the payment of claims against the Principal for bodily injury and/or property damage to third parties”. Its governing provisions are RCRA section 3004, 40 CFR § 264.147 or § 265.147, and any governing state agency rules. Termination and cancellation notices go to the Regional Administrator, and the surety must notify the Regional Administrator of all claims filed and payments made. |
| Typical penal sum | Stated per occurrence and as an annual aggregate, separately for sudden and nonsudden accidental occurrences Minimum liability coverage, exclusive of legal defense costs: sudden accidental occurrences at least $1 million per occurrence and $2 million annual aggregate (§ 264.147(a)); nonsudden accidental occurrences at least $3 million per occurrence and $6 million annual aggregate (§ 264.147(b)); or, if combined, at least $4 million per occurrence and $8 million annual aggregate. § 265.147 sets the same amounts. The bond can be combined with insurance, a letter of credit, the financial test or guarantee, or a trust fund, with one mechanism named “primary” and the others “excess” (§ 264.147(a)(6), (b)(6)). |
| Who needs it | Owners and operators of hazardous waste treatment, storage and disposal facilities (TSDFs) that choose a surety bond to show liability coverage Sudden-occurrence coverage applies to every TSDF. Nonsudden-occurrence coverage applies to surface impoundments, landfills, land treatment facilities and disposal miscellaneous units. The surety must be listed in the most recent U.S. Treasury Circular 570 (§ 264.147(i)(2)). |
| State statement condition | A surety bond counts only if the Attorneys General or Insurance Commissioners of the surety’s state of incorporation and of each state where a covered facility is located have told EPA in writing that the bond is a legally valid and enforceable obligation in that state § 264.147(i)(4) and § 265.147(i)(4). Ask the EPA Region or authorized state agency whether those statements are on file before relying on this bond. |
| What it covers | Valid third-party liability claims for bodily injury and property damage caused by accidental occurrences arising from operations of the facility or group of facilities The surety pays a claim only on (a) a notarized Certification of Valid Claim signed by the principal and the claimant(s), in the wording set out in the bond, or (b) a valid final court order establishing a judgment against the principal. The bond lists exclusions, including contractual liability, workers’ compensation and similar obligations, bodily injury to employees and their families, aircraft, motor vehicles and watercraft, and damage to property the principal owns, rents, occupies or controls. Payments reduce the bond until they reach the penal sum, and the surety’s obligation never exceeds the annual aggregate penal sum. |
| Form number / edition | No form number · wording prescribed by regulation and must be identical § 264.147(i)(3) and § 265.147(i)(3) require wording identical to § 264.151(l). eCFR is current as of 2026-10-19. The latest version of § 264.151 (January 22, 2025) corrected the citation in the signature certification of paragraph (l) from “264.151(1)” to “264.151(l)”. Use the corrected text. |
| Effective / cancellation | Effective from the date stated on the bond (12:01 a.m. standard time at the principal’s address) until terminated The surety may cancel by certified mail to the principal and the EPA Regional Administrator, but cancellation cannot take effect during the 120 days beginning when both receive the notice (shown by the return receipt). The principal may terminate by written notice to the surety and the Regional Administrator(s). Coverage is required until the Regional Administrator confirms in writing, after closure is certified, that it is no longer needed (§ 264.147(e)). |
| Source | eCFR — 40 CFR 264.151, Wording of the instruments (official regulation text · paragraph (l) · current as of 2026-10-19) Also: 40 CFR 264.147 and 40 CFR 265.147 (liability requirements, amounts and surety bond conditions); EPA — Financial assurance requirements for TSDFs (see “What are the Liability Requirements?”) |
| Status | current |
| Last verified | 2026-10-21 |
From the conditions of 40 CFR 264.151(l): “If the Principal fails to satisfy a valid third party liability claim, as described above, the Surety(ies) becomes liable on this bond obligation.”
And: “The Surety(ies) shall satisfy a third party liability claim only upon the receipt of one of the following documents:” a certification of valid claim from the principal and claimant, or a valid final court order.
This bond protects third parties during the facility’s operating life. Closure and post-closure costs are covered by different instruments: the EPA RCRA financial guarantee bond (40 CFR 264.151(b)), which pays into a standby trust, and the EPA RCRA performance bond (40 CFR 264.151(c)), where the surety can do the closure work. Most facilities need both kinds of assurance.
Liability coverage can be stacked from several mechanisms. Condition 5 of the bond says whether it is “primary” or “excess” coverage when combined with insurance or another mechanism. Our commercial surety primer explains how regulatory bonds like this differ from insurance, and the public owner’s guide to verifying surety bonds shows how to check a Circular 570 listing.
Open the Source link above for the official regulation text on eCFR. We summarize field facts and quote short key clauses rather than reproducing the complete bond body. Authorized states may use their own equivalent wording, so confirm with the state agency.