In one sentence
Coverage for environmental liabilities, sometimes required where a property carries contamination risk.
The longer version
Environmental insurance can bridge risk where a Phase I or II leaves residual concern, protecting the lender against cleanup and liability costs. It is a tool for lending on properties with an environmental history.
When used, the policy terms and limits are diligence items tied directly to the environmental findings.
Common questions
- What is environmental insurance in real estate?
- Coverage for environmental liabilities, often a pollution legal liability policy, covering cleanup costs and third-party claims from contamination.
- When do lenders require environmental insurance?
- Sometimes where a property has known or suspected contamination, as an alternative or supplement to an environmental indemnity or holdback.
- Does environmental insurance replace a Phase I?
- No. The Phase I identifies risk. Insurance may be one way of addressing what it finds.
Keep reading
- The due diligence checklist, built to be runChecklists as systems, not documents.
- The commercial loan closing checklistWhat goes on the list and who owns each line.
- The commercial loan closing processThe five stages from term sheet to funded.
- Due diligence softwareThe request list, the owners and the dates in one place.