What is the role of insurance in Brownfields transactions?
Insurance can help reduce the risk for many of the key players in a Brownfield transaction, thereby facilitating cleanup and redevelopment. For example, insurance can reduce the risk to a property owner who wants to sell a property but is concerned about potential liability for environmental contamination discovered after the sale. Insurance can also help reduce a prospective buyer’s risk of potential liability for cleanup or for personal injury and property damage claims. These and other kinds of insurance are increasingly helping to encourage lenders to provide loans for contaminated properties. In addition, insurance can be used to reduce the risk of potential liability of cleanup contractors. The new insurance products vary based on the particular policy and insurer, but the following general types of insurance are most commonly used in brownfield transactions: cleanup cost cap insurance, environmental impairment insurance and secured creditor insurance.
