Environmental Insurance and Financial Institutions

Abstract

Environmental insurance transfers to an Insurer all or part of a financial institutions loss resulting from legal liability for pollution conditions, or loss resulting from a borrower loan default and the discovery of a pollution condition on property that serves as collateral for a loan. Today, several major environmental insurers offer diverse, broad and flexible insurance policy terms and conditions. The placement of environmental insurance can add positive value to the financial institution’s balance sheet by providing more protection to the financial institution than the traditional environmental due diligence methods and loan underwriting process affords.