Topic 64
Environmental Insurance
Insurance is generally available to buyers to deal with cost overruns incurred in resolving postclosing environmental issues. Topic 64 explores the essential issues of such insurance and what such insurance is and is not.
GENERAL TERMS OF ENVIRONMENTAL INSURANCE
- Certain underwriters have made available insurance to cover costs overruns in excess of state-approved remediation plan spending estimates. A general description follows.
- Underwriters preview or perform their own environmental cost assessment of the approved plan to determine the cumulative spending level after which insurance will take over.
- One-time, up-front premiums approximate 2.5% of the agreed insured amount (the amount in excess of the spending plan).
- A deductible amount of approximately $250,00 to $500,000 is typically offered by the insurer.
- Terms of up to ten years are generally available.
- Coverage is also available for newly identified site contamination of the same contaminants discovered in the course of performing the site remedial plan.
- Coverage does not cover new contamination conditions that arise that are outside of the scope of known contaminants specified in the remedial plan.
- Coverage is provided for cleanup overruns at a covered location or beyond the boundaries of the covered location that is included in the remediation plan.
- Cost overruns associated with off-site (from the property being remediated under the plan) cleanup costs for pollutant originating from the ...
