Environmental insurance: a financing facilitator

✍ Scribed by Michael J. Bell; Jonathan Pearlson

• Book ID: 101758156
• Publisher: Wiley (John Wiley & Sons)
• Year: 2004
• Weight: 190 KB
• Volume: 3
• Category: Article
• ISSN: 1473-1894
• DOI: 10.1002/bref.104

✦ Synopsis

Abstract

Environmental insurance is being used with ever increasing frequency in real estate‐backed financial transactions. While the products have been available for some time, they are now reaching the point of being a commonly accepted risk management tool.[According to one carrier, in the United States alone, environmental insurance has become a $1.4bn market. See ‘Insuring Against Environmental Liability’, reprinted from Canadian Insurance, November 2002, at URL http://www.xlenvironmental.com/icf/insuring.htm.] Perhaps more importantly, some lenders and real estate owners are using the products in an increasingly creative manner in order to facilitate better deals. This paper will summarise briefly some of the insurance tools currently available, followed by a discussion of how the policies treat mold and terrorism risks. The balance of the paper will detail a number of innovative ways in which environmental insurance policies have been implemented to benefit borrowers and lenders, often providing one or both with a competitive advantage in the marketplace. Copyright © 2004 Henry Stewart Publications