Pollution Insurance for Lenders

I recently learned more about Beazley Group’s pollution liability and clean-up insurance coverages.

Here are some highlights of this coverage:

– The policy is in the name of the lender only – it protects the bank’s interest in the property.

– Coverage is provided on a single-loan basis only. Have a loan where you are concerned about environmental issues? You buy this insurance on a specific location.

– Covered locations are the collateral property for the covered loan. If several properties are collateral for the same loan, they can all be covered.

– Policy limits available up to $10,000,000

– Policy terms are available for up to 10 years.  Buy the coverage for long-term protection

– Minimum premium: $10,000 per loan.

– In the event of a default and discovery of a Pollution Condition, insurance pays the lender the lesser of the outstanding loan balance or the anticipated Cleanup Costs.

– Provides third-party Cleanup Costs, Bodily Injury, Property Damage coverage without any requirement for borrower default.

– Provides first-party discovery for Cleanup Costs and third-party trigger for bodily injury and property damage after the lender has foreclosed on a covered location.

This coverage could be used by a bank to take on a loan where the pollution issues are a concern in the underwriting process.  It can be purchased on new loans or existing loans that are current.

Glad to talk if this is something your bank is interested in learning more about.