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Real Estate Environmental Site Liability: Is Your Company at Risk?
The Necessity of Real Estate Pollution and Environmental Liability Insurance
Types of Pollution and Environmental Liability
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The Necessity of Real Estate Pollution and Environmental Liability Insurance
Effectively mitigating the risks from environmental contamination requires more than a comprehensive environmental risk management plan, specific contractual language, financing strategy and even general liability and property coverage.
Business owners, developers and operators also need Real Estate Site Pollution and Environmental Liability insurance.
Without this crucial coverage, the potential consequences can include:
  • Direct losses from litigation costs, unexpected cleanup expenses and damage payments to third parties.

  • Indirect losses from, for example, contamination that can make facilities unusable, causing business interruption losses. Also included are losses in rental income and costs associated with relocation.
  • Property devaluation from environmental liabilities that can dramatically affect the overall value of real estate or the transferability of individual assets.
There are two kinds of real estate site pollution and environmental liability insurance: Pollution Legal Liability (PLL) and Remediation Cost Cap (or Stop Loss) policies.
Pollution Legal Liability insurance is designed to provide coverage for any unknown pollution conditions discovered during subsurface investigations, onsite operations and real estate transactions.
PLL Coverage options generally include:
  • on and off-site cleanup of pre-existing or new conditions
  • third-party claims for on-or off-site personal injury and property damage
  • business interruption (as a supplement to general liability policies)
  • transportation liability, and
  • off-site disposal of hazardous waste.
Remediation Cost Cap Insurance, also known as Cleanup Cost Cap/Remediation Stop-Loss (or excess) coverage, provides a financial back up when cleanup jobs exceed $2 million. This vital insurance also covers cost overruns for known significant contamination costs from finding new contamination during a cleanup or those arising from design negligence. 

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