Insurers are realizing the many benefits of “green buildings”—structures that are built or renovated to be energy-efficient and disaster-resistant as well as protective of indoor-air quality and the environment. Thus, there are now:
· Insurance policies that protect the installer or owner of an energy-efficient project against losses form the failure of the improvements to actually achieve the anticipated energy savings;
· Performance bonds issued by insurers for contractors to guarantee the predicted energy savings to be achieved;
· New insurance products to insure renewable energy projects;
· Discounted “Green Gard Certified Green Building Coverage”
· “Green amendments” to builders risk policies and “Upgrade to Green” endorsements to homeowners and commercial property owners policies; and
· Insurance coverage for the engagement of a LEED-certified architect or engineer to guide green design or rebuilding.
This commentary written by insurance coverage attorney Kathleen Havener discusses all of these new developments.
Why should coverage lawyers care?
- It’s prudent to advise clients on the advantages of green construction and green facilities;
- Standard insurance policies won’t address the risks and advantages involved; and
- Insurance and risk management professionals are encouraging the development of green buildings.
As the author warns, “Parties can’t rely on standard contracts to address the risks involved.”