Waste Management 2015 Annual Report Download - page 73

claims is generally limited to the per-incident deductible under the related insurance policy. As of December 31,
2015, our commercial General Liability Insurance Policy carried self-insurance exposures of up to $2.5 million
per incident and our workers’ compensation insurance program carried self-insurance exposures of up to $5
million per incident. As of December 31, 2015, our auto liability insurance program included a per-incident base
deductible of $5 million, subject to additional deductibles of $4.8 million in the $5 million to $10 million layer.
We do not expect the impact of any known casualty, property, environmental or other contingency to have a
material impact on our financial condition, results of operations or cash flows. Our estimated insurance liabilities
as of December 31, 2015 are summarized in Note 11 to the Consolidated Financial Statements.
The Directors’ and Officers’ Liability Insurance policy we choose to maintain covers only individual
executive liability, often referred to as “Broad Form Side A,” and does not provide corporate reimbursement
coverage, often referred to as “Side B.” The Side A policy covers directors and officers directly for loss,
including defense costs, when corporate indemnification is unavailable. Side A-only coverage cannot be
exhausted by payments to the Company, as the Company is not insured for any money it advances for defense
costs or pays as indemnity to the insured directors and officers.
Regulation
Our business is subject to extensive and evolving federal, state or provincial and local environmental,
health, safety and transportation laws and regulations. These laws and regulations are administered by the U.S.
Environmental Protection Agency (“EPA”), Environment Canada, and various other federal, state, provincial and
local environmental, zoning, transportation, land use, health and safety agencies in the United States and Canada.
Many of these agencies regularly examine our operations to monitor compliance with these laws and regulations
and have the power to enforce compliance, obtain injunctions or impose civil or criminal penalties in case of
violations. In recent years, we have perceived an increase in both the amount of government regulation and the
number of enforcement actions being brought by regulatory entities against operations in the waste services
industry. We expect this heightened governmental focus on regulation and enforcement to continue.
Because the primary mission of our business is to collect and manage solid waste in an environmentally
sound manner, a significant amount of our capital expenditures are related, either directly or indirectly, to
environmental protection measures, including compliance with federal, state or provincial and local rules. There
are costs associated with siting, design, permitting, operations, monitoring, site maintenance, corrective actions,
financial assurance, and facility closure and post-closure obligations. In connection with our acquisition,
development or expansion of a waste management or disposal facility or transfer station, we must often spend
considerable time, effort and money to obtain or maintain required permits and approvals. There are no
assurances that we will be able to obtain or maintain required governmental approvals. Once obtained, operating
permits are subject to renewal, modification, suspension or revocation by the issuing agency. Compliance with
current regulations and future requirements could require us to make significant capital and operating
expenditures. However, most of these expenditures are made in the normal course of business and do not place us
at any competitive disadvantage.
The primary United States federal statutes affecting our business are summarized below:
• The Resource Conservation and Recovery Act of 1976 (“RCRA”), as amended, regulates handling,
transporting and disposing of hazardous and non-hazardous waste and delegates authority to states to
develop programs to ensure the safe disposal of solid waste. In 1991, the EPA issued its final
regulations under Subtitle D of RCRA, which set forth minimum federal performance and design
criteria for solid waste landfills. These regulations are typically implemented by the states, although
states can impose requirements that are more stringent than the Subtitle D standards. We incur costs in
complying with these standards in the ordinary course of our operations.
• The Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended,
(“CERCLA”) which is also known as Superfund, provides for federal authority to respond directly to
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