The most recent high level of federal involvement of environmental restrictions and requirements placed upon consumers and businesses in decades, means that we all must be more aware of the impact our personal and business activities have upon the environment, or face stiffer penalties, including jail time. This is of the newest trend in property and liability insurance today. 20% of residential and 40% of commercial construction today is green.
With a nearly $9 billion budget, the federal government's environmental watchdog agency since 1970, the EPA has added more than 41 new industries. This has come with 3,460 new regulations and over 90 new substances to it's watchdog list with fines starting at $32,500, including criminal prosecution. Without actually incurring an incident, failure to collect and report data can yield a fine or worse. Recently passed legislation including The American Recovery and Reinvestment Act (ARRA) includes efficient use of energy and water resources and construction materials that are non-polluting and sustainable.
Going green goes beyond cleaning current toxic sites or clean water and air. Construction initiatives today, either new or renovation, often must meet certifiable green requirements to lower energy usage, reduce carbon footprint, and include suggested construction objectives of ARRA above. Often, green properties viewed by many insurance companies as lower risk properties, costing less to insure. Green power generating equipment, alternative water sources and vegetative roofs, are all examples of green construction. While vegetative roofs often reduce water and harmful chemical run off, lower building heating and air conditioning costs, improper drainage and ventilation of these types of roofs can cause water and mold issues inside of these buildings. There must be proper ventilation and drainage to avoid unhealthy conditions inside vegetated roofed buildings.
Currently, some insurance companies are offering a token $10,000 to $25,000 coverage limit, with some companies offering even higher limits. Other green initiatives recognized and rewarded by insurance companies include use of hybrid autos, loss control professionals (green advisors), promotion of public transit, environment protection, water enhancement, and climate change recognition. Even Dow Jones has established a "sustainability index".
To many people, green coverage often gets confused with pollution liability or building ordinance coverage. It is however, a new and separate upcoming protection and response to our federal government's environmental activism impact on our business and personal activities. Green coverage now sits next to important coverage concerns such as water damage, debris removal, business interruption, workers compensation, professional products and operational liability, to name just a few.
Let us know if we can help you with this new frontier of regulation and available coverage.
Sources:
Ace Insurance 10/11 Advisen, "Global Environmental Legislation"
Fireman's' Fund / Allianz Fact Sheet
A.Wells,10/21/ 2013 Insurance Journal, "Green Insurance Market"
