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On the subsequent pages, you will find definitions of the various all risk and specialty pollution policies and their many benefits.
Investing in the redevelopment of a contaminated property used to offer more risk than benefit.
The potential for environmental liability or unknown cleanup costs and litigation often turn an appealing real estate transaction into a financial tragedy.
Recently, environmental insurance has been designed for each specific site and has provided a risk transfer mechanism that makes investment in contaminated property a profitable transaction. These policies provide a solution for problematic properties.
Once a property is divested, the former owner does not want to be responsible for the cost of outstanding environmental liabilities that are unknown at the time of divestiture.
When a company decides to acquire or merge with another firm, the purchaser can become liable for all the environmental liabilities related to that company's past or present operations.
During the last decade the courts found commercial lenders liable for environmental issues at foreclosed properties, creating a category of business risk not previously considered in the lending process. Today, lenders require environmental impairment liability policies during transactions involving distressed property or buildings.
In commercial real estate transactions that include light industrial
or commercial office property, all parties involved have relied solely
upon the results of a Phase I Environmental Assessment as their only
test of environmental due diligence. Satisfied with the content of
the Phase I, all parties move forward with the acquisition. If a Phase
I did fail to identify a problem, the owner of the report can only
recover damages if the consultant was negligent in performing services.
The oversight must also be inside the consultant's agreed upon scope
of services.
During the last twenty years, over 500,000 underground storage tanks have been removed and the sites remediated or treated for hydrocarbon contamination. Over 80% of those sites were never tested for the presence of MTBE. MTBE is a carcinogen that migrates much faster than petroleum contaminants. MTBE is a major threat to our drinking water supplies. Many properties that were once given a clean bill of health by state and regional regulators, are now being required to perform additional corrective action on their property.
The solutions to these and other issues can be found in the definitions
of the policies listed in the column to the left.
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