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The world of brownfield insurance (BI) was recently shocked to learn that AIG was non-renewing its site pollution liability (SPL) book of business. AIG's Pollution Legal Liability Select (PLLS) policy, issued in 1995, was environmental insurers' first response to the Brownfields Movement. It allowed them to modify previously restrictive and inflexible policies so that they could be used to facilitate transactions. The idea of the policy was that the insured would be able to "select" specific coverages out of a number of modules based on distinctions of time, location, and types of damage, for instance On Site Cleanup Costs due to Pre-Existing Pollution Conditions. However, in addition to this selection process, specific policies also need to be manuscripted or tailored to fit specific risks. They are negotiable contracts, and, as illustrated by most of the cases involving such policies over the last 10 or 15 years, need to be negotiated by coverage experts.
Vapor Intrusion, or VI, occurs when contamination beneath the ground emits toxic vapors that can travel through the soil and enter the interior spaces of houses and buildings. The types of contamination most commonly associated with VI concerns are industrial solvents like chlorinated volatile organic compounds (CVOCs), and petroleum products like gasoline. The Environmental Protection Agency just released final guidance on vapor intrusion issues, which regulates how inhalation exposures from VI are assessed and controlled.
Financial institutions require the completion of environmental due diligence of a commercial real estate collateralized lending transaction for many reasons. They may wish to understand the environmental condition of the proposed collateral and ensure a Borrower's compliance with applicable regulations prior to making a loan; to reevaluate the collateral during a renewal or refinance transaction; to determine the collateral's condition at the time of a loan default; or to obtain information about an unexpected environmental condition encountered within the loan term.
I read with interest the article by Ken Kaye on two scientist's challenge of other scientist's linking warmer oceans to more intense hurricanes (Sun-Sentinel page 1, December 13, 2007).