I have written repeatedly about Fireman's Fund insurance products at GBL--see here and here. I got the opportunity to talk to Fireman's Fund represnetatives at Greenbuild about their goals for green building insurance. I learned some interesting things. First, their Greengard suite of products is doing very well. One innovative product they have brought on line is their Building Commissioning Coverage:
Following a covered loss, Fireman's Fund will cover the cost to hire a commissioning engineer to ensure that your building systems (HVAC, electric and plumbing) operate at peak performance and in alignment with one another. Plus, we will pay for the engineer to run a test and balance on your HVAC system, including heat, ventilation, and air conditioning -- whether or not it was directly involved in the loss.
This is very interesting coverage in that it links directly with low cost, low tech ways of enhancing the energy efficiency of buildings. The Fireman's Fund representatives and I also discussed the possibility of developing coverage for designers of green buildings. One of the biggest legal risks associated with green buildings is to designers, contractors and others involved in the green building team. These team members have control of separate components of the process of developing a green building which must work together to create a successful green project. If a team member fails to do his job properly, the risk exists that the building may not acheive certification. If money, time, financial incentives, etc. are lost, liability will have to be assessed. Fireman's Fund is looking for ways to quantify and allocate this risk to develop a liability product to offer green building professionals. I believe that such a product is very necessary as green building litigation, like Southern Builders v. Shaw Development, increases.
UPDATE: AIG has launched some green insurance products, including one that protects against adverse green publicity:
provides up to $50,000 in coverage, per occurrence, when a green building experiences adverse publicity. It also provides funds to employ crisis management specialists to manage adverse publicity; guide and counsel key company personnel; and provide other services to assist in restoring a company’s reputation.
UPDATE: Chubb has added some green coverage, including:
Business income and extra expense insurance, which can help companies with green properties quickly restore their operations after a loss. For example, an insured business can be reimbursed for the extra expense it incurred to purchase power from a public utility until its alternative power-generating equipment is repaired or replaced.
Reimbursement for the costs of hiring an accredited design and reconstruction professional, registration and certification fees, diverting recyclable debris after a loss to recycling facilities rather than landfills, and other green services.
A period of restoration that recognizes that it may take longer to rebuild a green building to its pre-loss condition than a typical office building and, therefore, take longer to restore business activity and revenues.