Environmental/Pollution Legal Liability Insurance

Property owners, real estate managers and developers face a host of environmental exposures that can be devastating to their business. Whether as a result of their operations, their position as owners, their contractual obligations, or the actions of contractors, they may find themselves liable for conditions they had little to do with or knew little about, especially following a merger or redevelopment. Examples include:

  • Acquisition of a site with historical contamination including buildings that contain asbestos and lead paint.
  • Potentially hazardous tenant operations and activities such as dry cleaners, car repair facilities or any other business that uses or stores significant quantities of hazardous chemicals. Such operations create significant potential liability for building owners even with leases with indemnification agreements.
  • Renovations are typically done in one section of a facility while another section remains operational. This creates the possibility of contaminants, such as lead based materials, asbestos and other hazardous substances or by vapors or gases emitted by newly installed material, spreading to tenants or workers causing bodily injury and subsequent litigation.
  • Indoor air quality of commercial buildings with poor air circulation and/or older or poorly maintained HVAC systems are vulnerable to mold or Legionella contamination. The potential consequences can include:
  • Direct Losses: This includes legal defense costs and unexpected cleanup expenses and damage payment to third parties
  • Indirect Losses: Contamination of a property can render it untenable causing a business interruption loss, loss in rental income and costs associated with tenant relocation.
  • Property devaluation: Environmental liability can dramatically impact the overall value of large asset holdings or the transferability of individual assets. This also includes consequential reputational damage to the property.