Going Green: The Need to Address Adequate Insurance Coverage
The phrase “going green” is being used more and more in virtually all industries, and the construction industry has been one that has been at the forefront. The concept of sustainable “green” buildings is a major focus.
A number of organizations have been created and a number of programs established which promote the “green” or “sustainable building” concept. These organizations and programs have established certain standards relating to construction that attempt to measure the environmental performance of the building throughout its useful life. The programs generally consider a structure’s total economic and environmental impact and performance, from material extraction and product manufacture to product transportation, building design and construction, operation and maintenance, and building reuse or disposal. Generally, the end result is a structure that is cost effective in terms of energy consumption, and has little or no impact that adversely affects the environment. However, going “green” has a price.
At the present time, the cost of going “green” in terms of construction will add to the construction costs of the structure. How much is added depends on the extent of “green,” and incorporating innovative technology.
One of the areas that has been overlooked is the area of green building insurance. Fortunately, the insurance industry is supplying an insurance product to meet the needs of those who choose to erect and maintain green buildings. The new green coverage is generally available as an endorsement to existing property and casualty policies that provide for replacement cost coverage. The green coverage is generally an enhancement that provides an additional amount of money to update the replacement of covered property using green materials, equipment or techniques. Such coverage is generally limited to specific property and has to be tailored to the specific property. Nevertheless, the coverage is available, and anyone who intends to own a “green” structure should give consideration to it.
Green coverage can include the following:
- In connection with any restoration, the insurance will pay for the coverage of available green upgrades, which may cost more
- Extending the debris removal coverage to cover any additional expense associated with recycling products
- Compensation for loss of income if the building had features that allowed it to sell electrical power on the electrical grid (assumes some sort of generating capability)
- Provide coverages relative to such things as vegetative roofs
If you are going to go “green” in terms of construction, you should investigate the availability of green building insurance. It can provide a valuable security blanket for the structure, not only during construction, but thereafter.
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