A Certificate of Financial Responsibility is an electronic document the US requires of some vessel operators. Here is an explanation of why the government mandates a COFR, the types of vessels that need one, and which waterways require it.
Why the Government Requires COFRs
Congress passed the Oil Pollution Act of 1990 in response to the Exxon Valdez oil spill of 1989. This legislation ensures that anyone transporting pollutants be financially capable of cleaning up spills, and a COFR is proof they can do so.
What Types of Vessels Need a COFR
Most ships over 300 gross tons require a COFR, as do those of any weight that carry oil in certain areas. However, some exceptions exist. For example, those owned by the US government or governments of other countries do not need one, nor do engineless barges carrying nonhazardous cargo.
Waterways That Require a COFR
Vessel owners need a COFR to transfer oil to another ship or to an intermediate destination within the Exclusive Economic Zone of the US. Most US territories also require one.
By having a COFR on file with the US Coast Guard, you are not just fulfilling your legal responsibility; you are also giving yourself peace of mind that you are covered in case a spill were to occur.