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Environmental and pollution insurance-do you need it?

By: Garris Thorntenson

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If you are currently pursuing some commercial real estate properties, or you plan to buy one soon, you should go and check the property for any signs of toxic pollution or contamination. The environmental problem could have been caused by toxic waste from the polluted earth, the water from the ground or the building structure itself. If left as is, it might affect not just the source building, but also the properties near the estate. If that does happen, the property owner might face lawsuits and claims for damages and the clean-up costs for clearing up the toxic waste and pollutants. The total costs of the clean-up involved could be staggering and might even go beyond the value of the property itself. If there is contamination, the relevant authorities might take action and you may be faced with penalties in relation to the laws governing the environment.

As the owner (or former owner), you could be responsible for contaminants that migrate to the neighboring properties. This includes personal injury and property damage that is caused by the release of pollutants (including emissions). So how do you ensure that your company is protected?

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.

Among the existing environmental regulations, the two most important and well known are the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) enacted in 1980, and the improved and revised version, Superfund Amendments and Reauthorization Act, otherwise known as SARA, which was enacted in the year 1986. In order to tackle the rising costs of clearing up the contaminated and abandoned properties several departments and organizations have set up central funds to help in the cleaning process and to help the related parties recover their losses.

If you have checked the premiums for insurance policies covering environmental risks of commercial properties, and you think that it might be too expensive or it might make you initial investments in purchasing the building seem too large of an amount, then you can go check the current Commercial General Liability, or CGL, policy that you have been keeping and paying for. Some of the CGL policies do cover for such incidents of environmental lawsuits though it was not openly declared. However, in recent years, due to the escalating lawsuits involving the very same area and insurance companies ended up paying for liabilities as a result of pollution, the insurance companies have since readjusted their clauses to not cover for such incidents.

With rising news coverage on the pollution problems and the large amount of money property owners have to pay for the damages and cleaning up, insurance companies have come up with policies which provide coverage especially for environmental damages and pollutions. This type of insurance will cover costs and damages resulting from pollution and contamination of toxic waste, damages and harm to the estate or physical harm to a third party, the cleaning-up bills of a third party's estate that is not considered the policy owner's estate, the cleaning costs of an estate that is not owned by any individuals but damaged by the policy holder’s estate, and finally the transportation costs of products or waste which have caused pollution and contamination 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.

Article Source: http://depositarticles.com/

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.

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