As insurance underwriters become more familiar with the risks and opportunities in the green building hemisphere, more carriers are entering the marketplace with increased capacity and product offerings, according to a year-end update of insurance global giant Marsh’s green building report.
The report entitled "Marsh Green Built Environment in the United States Market Survey" was first released in June 2008. Since then, several additional builders’ risk insurance carriers now offer specific green endorsements. They include Zurich Financial Services, Travelers Insurance and ACE USA.
Zurich recently introduced Better Green, which is a builders’ risk green property endorsement. The coverage applies to projects that incorporate techniques from one or both of two standards: The LEED rating system of the U.S. Green Building Council or the Green Globes rating system. Coverage includes air quality management expense, LEED accredited professional expense, recertification fees, building commissioning expense and debris recycling.
Travelers also has added additional coverage to its existing green insurance offering, which may cover many costs related to rebuilding and recertifying a covered property to its budgeted level of green certification. The coverage may also apply to technology used in green construction, such as alternative power generating equipment and alternative water systems.
The retail inland marine division of ACE USA has added green building endorsements to its builders’ risk product offering. According to ACE, the endorsements are designed to address customers’ potential financial loss stemming from changes in environmental standards, repairs using green materials, additional debris-removal expenses, and loss of tax credits.
In the year-end update, Marsh notes that vegetative roofs have gained more attention and that one insurer excludes damage to vegetative roofs on properties located in high hazard wind zones. The insurance giant recommends that policyholders ascertain how their certifying authority evaluates a loss.
For example, once a building is certified under the LEED New Construction and Major Renovation Track, is it always certified even if it sustains a partial loss? And in the event of a total loss, does the authority require the building to be recertified under the standards that existed at the initial certification or under the current standards?