In the event of both a loan default and the discovery of environmental contamination on a property, the policy will cover either the estimated clean-up costs or the loan balance, whichever is lower. The policy also pays clean-up costs for environmental contamination at properties owned by the lender as the result of a foreclosure.
In addition, the coverage protects the lender against third party claims for clean-up, bodily injury, property damage, and defense costs associated with the collateral property at all stages of a commercial loan and regardless of whether the loan is in default.
Announcing the launch of the new lenders' liability policy, Jayne Cunningham, Beazley's environmental focus group leader, said: "We have designed our new policy carefully to address a broad array of environmental exposures that can make lending against property perilous. Contamination can be hard to detect and take years to emerge. Through this coverage, we aim to give lenders peace of mind over the long term, regardless of the status of their loan."
In addition to this new coverage, Beazley's fast growing environmental liability team provides tailored insurance products to meet the needs of a wide variety of commercial organizations, including property owners and developers; industrial and commercial operations; general and specialty contractors; and the environmental services industry.
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