Pollution legal liability Insurance functions as a risk management tool for residential, commercial and industrial property owners. The policy provides protection against claims arising from unknown historic and future environmental liabilities that could impair an owner's ability to sell, transfer, develop or operate property. This coverage can provide protection against regulatory risk, should the action levels for specific contaminants change over the policy period. In addition, the risks of acquiring or making new investments in commercial properties are minimized when a pollution legal liability insurance policy is in place before closing. The policy can replace the need for indemnification agreements, personal recourse guarantees, escrow accounts or price reductions that buyers and lenders often require. These policies provide the confidence that you have diligently investigated and managed the risks and long-term liabilities associated with ownership of environmentally impacted property.

Site Pollution Liability

  • Policy terms up to 10 years

  • Policy limits up to $50,000,000

  • Minimum premium for 10-year term starts at $100,000

  • Can cover both unknown pre-existing pollution conditions and new pollution conditions 

  • Claims-made policy form

  • Coverage Triggers: Discovery, Third-Party, or Government Mandate

  • Flexible Deductible/Premium Structure

  • Transferability to future owners

Policy Features

  • Coverage for cleanup costs, including emergency response costs and restoration costs, of pollution conditions on, at, under or migrating from a covered property.

  • Coverage for third-party bodily injury and property damage claims, including loss of use, diminution in value and natural resource damages.

  • Coverage for non-owned disposal site liability.

  • Coverage for transportation pollution liability.

  • Coverage for business interruption and extra expense, including loss of rental income

  •  Coverage for legal defense expense

Basic Policy Coverages

  • Coverage for first-party diminution in value of a covered property

  •  Coverage for contingent business interruption 

  • Coverage for disinfection expense (of viruses and bacteria)

  • Coverage for cleanup costs of known pre-existing pollution conditions excess of indemnification

  • Coverage for contractual liability

  • Coverage for scheduled underground storage tanks

Additional Policy Coverages

Policy Benefits and Features:

  • Limits of liability up to $50M each pollution incident 

  • Claims-made and reported policy form

  • Policy terms up to 10 years

  • Broad pollutant definition includes mold and legionella

  • Third-party bodily injury and property damage for asbestos and lead-based paint

  • Coverage for above-ground storage tanks

  • Assignable to subsequent purchasers

  • Coverage available for U.S. or Canada with properties

Submission Requirements

  •  Environmental site assessment reports 

  • Purchase and sale agreement 

  • Redevelopment plans

Frequently Asked Questions

How can a Lender Protect Themselves?

As a risk-transfer solution, lenders should consider procuring a pollution liability insurance policy. Lender pollution liability insurance policies are available from several A.M. Best “A” or higher rated carriers providing indemnity protection for the lesser of the estimated cleanup costs or the remaining loan balance. In addition, the policy provides coverage for third-party bodily injury and property damage claims, diminution in value of the collateral, business interruption loss and legal defense expense.

Are you protected against an environmental issue that results in a default of your loan?

Financing a commercial property with identified known or potential environmental issues could result in unforeseen liability and substantial financial loss for a lender. Environmental due diligence, contractual indemnities and/or escrow agreements often fall short of mitigating the risk. As a result, these issues often stall or derail the deal as lenders are unwilling to accept the risk of the environmental exposure.

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