Commercial Green Insurance Explained
Upgrading to “green” is a still a relatively new, but increasingly popular, phenomenon and your commercial policies probably don’t specifically address “commercial green insurance” related risks or indicate whether or not they are covered on your commercial property or commercial general liability insurance programs.
Commercial Green Insurance For Commercial Property
One option/extension that is becoming more common is green upgrade property insurance limits and sublimits on commercial property insurance policies. These insurance extensions would pay for the additional cost to upgrade to a green-certified level in the event of a physical property loss. Update-to-green insurance benefits you because your building has the potential to be even more efficient after a loss, and you don’t pay the direct costs for the upgrades.
Commercial Green Insurance For Breach of Warranty/Breach of Contract
Though a typical commercial general liability policy will cover your organization for bodily injury, property damage liability and personal injury, breach of warranty and breach of contract are generally excluded. However, when you are an owner of a green-certified building, these coverages can be important to consider. This is because one of the most common claims against green property owners or managers is that after construction, the green building is not living up to promised standards. The building may not qualify for the LEED certification level promised, or savings on energy may not be as high as marketing and advertising materials guaranteed hence “Commercial Green Insurance” may be needed.
In the event of a “Green” type claim you will need to find out who is at fault, and doing so will require extensive testing of the building and its systems to figure out why it is performing under the promised standard. The way typical commercial general liability insurance policies are crafted now, the cost of this investigation may not be covered, but amendments and other standalone insurance solutions which we call Commercial Green Insurance are available to assist.