Pollution/environmental Insurance: Is There A Policy For You?

2007-09-12 Word Count: 748 Category: Insurance

For someone who is in the real estate market looking to make some profit by obtaining or purchasing real estate property for commercial uses, it is always advisable for them to check their property for possible pollution or toxic waste of any kind. The source of the contamination could be from the polluted soil or land, underground or the construction itself. Besides causing harm to its owners, it might be causing health problems and more to properties that are located near it. If the stated problems do exist, then the property owner will be looking at clean-up costs that could build up to quite a large amount, sometimes exceeding the value of the property itself! Worse still, the property owners might be paying even more for unseen payments to the relevant authorities that are related to the environmental laws and decree.

Being the owner or the past owner of the property could mean that you will be held responsible for the toxin and poisons spreading to buildings nearby. Possible charges against you would include personal injury lawsuits or property damage. In such cases, how do you protect you and your company from getting into trouble?

Most of the local, state or even federal environmental laws are still new and are constantly reviewed and changed. As new environmental laws are passed, it can be a challenge for current property owners or future buyers to keep track of the laws and regulations. But rest assured that only a few of the laws matter when it comes to developing a comprehensive understanding of environmental liabilities.

The two most well known of these laws are CERCLA (Comprehensive Environmental Response, Compensation and Liability Act of 1980), and the amendment, SARA (Superfund Amendments and Reauthorization Act of 1986). These are a federal funds set up to aid the clean-up of abandoned sites that have been polluted and to recover costs from potentially responsible parties.

Perhaps you feel that purchasing a new policy again would be hurtful towards your financial position. If that is the case, remember to review and read through your current Commercial General Liability (CGL) insurance policy. Some references can be found in past court cases that the statements found in Commercial General Liability policies covers charges regarding environmental problems or toxic harm, even though it was not openly made known by the insurance salesman. This trend of court cases has caused insurance companies to review and change the terms and conditions of their CGL policies so that it won't cover charges and payments regarding environmental problems and pollution.

After the insurance companies have tried taking out environmental and pollution coverage from their CGL policies, they then tried to market their new product which is designed to provide protection to policy holders related to pollution and environmental problems. Some important specifications of the new policies include coverage for possible occurrence of site clean-ups of the harmful materials, damage to the related properties, damages incurred by third party's properties or physical damages or harm, any costs or payments incurred for the cleaning up of third party's property that is not considered as policy protected site and payments for cleaning up costs that is not owned by the policy holder, and any third-party claims for payments of transportation of products or toxic and chemical waste which are causing the pollution problems.

If you are thinking of purchasing and developing a brownfield site, which means the commercial site that has been left undeveloped because of its excessive pollution problems, take note that there are insurance companies willing to offer you coverage for these areas. If there is no insurance coverage offered for these sites, this land may be left undeveloped since the risks of incurring clean-up costs and the further financial payments in penalties is too high.

To prevent from taking on too much business risk, go over your country and local state's law regarding pollution and environment. Take into account the amount you might have to pay and the general responsibility if you are found guilty of causing pollution harm and damage to the estates and properties located near you. If the laws are written in terms that you find hard to understand, you should look for help from lawyers who are knowledgeable in the field of environmental and pollution laws. You will then be able to decide if you need environmental insurance policies to help you in case of lawsuits in these areas.

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Garris Thorntenson is a general contractor and knows the importance of getting good protection with contractor insurance. One of the policies which he recommends is the environmental liability insurance and he recommends the experts at J6 insurance for their expertise in this very field. For more information about please visit www.j6insurance.com