Insurance Firms Begin to Cover Unforeseen Environmental Woes

THE JOURNAL RECORD, June 1, 1991 | Go to article overview

Insurance Firms Begin to Cover Unforeseen Environmental Woes


NEW YORK (AP) _ Insurance companies are offering a solution to developers and bankers who find them- selves paying for an unexpected cleanup of property where hidden environmental horrors lurk. Many in the real estate industry are terrified at the prospect of a government order under the federal Superfund Act to clean up an office building or vacant land they originally thought was fine but later discovered was polluted. Companies spend an average of $25 million to clean up a typical Superfund toxic waste site, says Moody's Investors Service. As a result, at least three insurers either are or soon will be offering new policies for coverage of unforseen environmental problem. The trend& shows how corporate America is& responding to the nation's heightened sensitivity to environmental problems. Analysts say this new type of busi- ness, a so-called environmental title insurance, has the potential for huge growth. "It's a much needed product on the market," said Geraldine Rudig, a vice president for Baybanks Inc. in Hartford, Conn. A recent federal court decision said banks can be held liable for cleanups of property for which they lent money if the banks influence management decisions at companies responsible for the toxic mess. "It has caused us as real estate lenders to take a very cautious look at lending," said Rudig, a commercial real estate specialist. Because of this, about 90 percent of all banks now require detailed reviews of commercial real estate for pollution problems, called environmental audits, before they will lend money, said Paul K. Freeman, president and chief execu- tive officer of the ERIC Group, a Colorado-based insurance company. Freeman's company is introducing property transfer liability insurance. It's designed to protect both lenders and borrowers against a Superfund-type pollution liability arising from a com- mercial real estate deal. "What they are paying for, in a sense, is the piece of mind that someone has examined that risk," Freeman said in an interview. Freeman, whose company spent $1.5 million in research and development of the environmental liability insurance, expects strong demand. ERIC Group reviewed 9,000 environmental audits of commercial real estate nationwide and found that one in eight had some type of environmental contamination. ERIC Group, which in 1987 began insuring contractors who remove asbes- tos from buildings, contends its property transfer liability insurance is "the first policy available on a nationwide basis. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Insurance Firms Begin to Cover Unforeseen Environmental Woes
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.