While redeveloping Brownfield properties creates many new advantages for the community, it can often times come with numerous roadblocks, risks and uncertainties throughout the development process. Let’s dive into how using environmental insurance can assist in de-risking a Brownfield project.

Before beginning redevelopment, the project owner knows that there are going to be environmental risks associated with the project by using a Brownfield. When preparing to start redevelopment, taking a deep dive into all of the potential risks lurking within the redevelopment site and considering potential roadblocks that may arise throughout the development period is a good starting point.

1. Regulatory and Legal Risks
   1. Joint and Several and Strict Liability Framework
2. Project Owners Considerations

   1. Cost Overruns Associated with Cleaning Up Known Contamination

   2. Clean-Up Costs upon the Discovery of Unknown Contamination

   3. Business Interruption

3. Community Considerations
   1. Obligation to Clean-Up Neighboring Properties
   2. Bodily Injury & Property Damage Claims as a Result of Contamination from an Insured site
   3. Claims as a Result of Loss of Value of Property
   4. Associated Legal Defense Costs
   5. Mandate from Agency to Clean-Up Contamination
   6. Fines and Penalties and Government Oversight Costs
   7. Governmental Re-Opening of Previously “Closed” Environmental Issues
   8. Associated Legal Defense Costs

After reviewing and considering the potential risks and roadblocks, it is pertinent to have an understanding of the environmental reports that are available when engaging environmental insurance as a de-risking agent. Environmental insurance can often serve as a foundation for risk mitigation. When choosing to move forward with purchasing environmental insurance to help de-risk a Brownfield project, there are numerous benefits to be considered.

• Quantify unquantifiable risk

   

• Reduce the need for intrusive testing by a prospective purchaser or lender

   

• Negotiating financing and investments

   

• The effect on the property’s value itself

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