1999 CPEO Brownfields List Archive

From: Tony Chenhansa <tonyc@cpeo.org>
Date: Mon, 5 Apr 1999 11:28:55 -0700 (PDT)
Reply: cpeo-brownfields
Subject: repost: Environmental Insurance: The Newest Tool in Brownfields Development]]
In regards to requests for HUD's insurance report, this message was
previously posted on Feb. 8, 1999.  The revised link for downloading the
report is


Tony Chenhansa

-------- Original Message --------
Subject: Environmental Insurance: The Newest Tool in Brownfields
Date: 08 Feb 1999 09:17:08
From: owner-hudusernews@aspensys.com
Newsgroups: cpeo.brownfields

Subject: Environmental Insurance: The Newest Tool in Brownfields

 Environmental Insurance: The Newest Tool in Brownfields Development

 A new tool is available to promote the cleanup and redevelopment of
 brownfields: environmental insurance (EI). A report released by HUD's
 Office of Policy Development and Research examines EI's potential to
 stimulate increased redevelopment of such sites. Environmental
Insurance for Brownfields Redevelopment: A Feasibility Study also looks
at the
 extent to which the public sector can target this insurance toward
 particular areas.

 The authors found that EI can reduce the risk and liabilities
associated with brownfield redevelopment by limiting exposure to cleanup
costs. EI
 helps quantify risk, which makes lending institutions more likely to
 invest in redevelopment. The authors also found that local economic
 conditions may positively affect the ability of EI to promote
 redevelopment. For example, in weak real estate markets, even minor
 reductions in risk can enhance the marketability of brownfield sites.

 According to the report, private sector demand for EI is growing
rapidly, often due to speculative redevelopment by venture capital pools
the insurance for risk management and loss prevention. Conversely, the
report states that public sector demand for EI is virtually nonexistent.
 most of the city officials interviewed were actively pursuing
 redevelopment, most were either unfamiliar with EI or skeptical that it
 could help them. Public sector purchasing procedures, especially
multiple bid requirements, often created insurmountable obstacles for
 providers as they tailored coverage to meet a city's brownfield
development needs.

 The report identifies an emerging mix of five EI products that may be
 useful to cities and others in the public sector who are involved in
 brownfields redevelopment. Each of the products reduces risk in
different ways:

 *  Professional liability insurance covers errors and omissions by
public agencies or private firms that manage or deal with contaminated

 *  Owner/operator liability insurance covers the firms or agencies
working on the site.

 *  Cleanup cost-cap or stop-loss insurance places an upper limit on the
 cleanup for site redevelopers.

 *  Legal defense insurance covers lawsuits associated with liability

 *  Re-opener or regulatory action insurance covers costs associated
with any future government actions that require further site cleanup.

 The authors recommend that local development agencies encourage the
 redevelopment of small sites by pooling potential projects that an EI
 policy could cover. Agencies could encourage land owners to buy the
 coverage to make their sites more marketable, or public agencies could
 purchase EI coverage for the pools and make it available to site

 The report also recommends that additional research occur before the
 Federal Government takes an official position on environmental
 This research should show whether EI provides access to project capital
 that would not otherwise be available. It should also examine if the
 differences between central city and suburban sites have implications
 insurance coverage. Finally, new research should determine how the role
 EI could change with the strength of the local real estate market.

 Environmental Insurance for Brownfields Redevelopment: A Feasibility
 is available online from HUD USER at:
http://www.huduser.org/publications/econdev/envins.html.  Copies may
 be obtained from HUD USER for $5.00.

 To order a publication from HUD USER, simply go to the HUD USER
 at: http://www.huduser.org and choose "Order Online Publications." 
 this point you can browse all the available titles, search the
 publications list by keywords, or type in the titles of the
 you want to order.  A convenient way to arrange payment for
 and services is by becoming a HUD USER Deposit Account Holder.  More
information is available on this service at: 

 You can also order publications from HUD USER by contacting us at:

 P.O. Box 6091
 Rockville, MD 20850
 1-800-483-2209 (TDD)
 (301) 519-5767 (fax)

 To stay abreast of new PD&R research and resources, subscribe to our
 listserv, HUDUSERNEWS. This free service will automatically send--to
your e-mail address--publication announcements and other notices from
U.S. Department of Housing and Urban Development's Office of Policy
Development and Research.

 To subscribe to HUDUSERNEWS, simply send a message to:

 In the body of the message, type: subscribe hudusernews your e-mail

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