On October 16th, the Fireman’s Fund Insurance Company introduced a Certified Green Building Replacement and Green Upgrade coverage endorsement, designed to provide lower premiums for buildings already certified under LEED and the Green Building Initiative’s Green Globes Rating System, as well as give owners of conventional buildings the opportunity to green their systems in the event of a covered loss. (Typical policies will only cover the cost of restoring a building to its original, pre-incident condition). For example, the new policy will provide owners and managers with funds to upgrade damaged building systems- from HVAC to lighting- to higher performance systems. In the event that a building is completely destroyed, the endorsement covers the extra cost of incorporating green systems rather than rebuilding to pre-incident specifications. Moreover, the package also includes funds for the payment of LEED or Green Globes certification costs.
Coverage is currently only limited to commercial properties, mainly because of the relatively recent expansion of LEED into the residential market. Fireman’s Fund worked in concert with USGBC and the Green Building Initiative in developing the package and believes it is presently the only carrier offering green coverage. Several of the articles linked below suggest that this is merely the tip of the iceberg in terms of the insurance industry’s interest in providing policies in connection with green building. Practitioners should thus remain aware of these insurance developments in the coming months, as they promise to only become more prevalent and, undoubtedly, more complicated.
- Fireman’s Fund Introduces Green Building Coverage (Insurance Jounal)
- Insurance Industry Puts Premium on Green Building (Energy Priorities)
- Under Construction: The Green Property Insurance Market (Insurance Journal)