If you are considering the purchase of a commercial property, the first thing you should do is check if it shows any signs of contamination by pollutants or toxic waste. The pollution problems could be caused by contaminated soil, underground water or by the building itself. The worse case scenario causes problems and harm to the estates or properties nearby as well. If that happens, the property owners might find themselves having to pay for cleaning up of the pollutants which might add up to be much more than the market price of the property. The owners might also be facing penalties which they didn't know about earlier in compliance with environmental safety laws and rulings.



As the owner (or former owner), you could be responsible for contaminants that migrate to the neighboring properties. This includes personal injury and property damage that is caused by the release of pollutants (including emissions). So how do you ensure that your company is protected?

Most of the local, state or even federal environmental laws are still new and are constantly reviewed and changed. As new environmental laws are passed, it can be a challenge for current property owners or future buyers to keep track of the laws and regulations. But rest assured that only a few of the laws matter when it comes to developing a comprehensive understanding of environmental liabilities.

The two most well known of these laws are CERCLA (Comprehensive Environmental Response, Compensation and Liability Act of 1980), and the amendment, SARA (Superfund Amendments and Reauthorization Act of 1986). These are a federal funds set up to aid the clean-up of abandoned sites that have been polluted and to recover costs from potentially responsible parties.

A way to protect yourself from taking on the risks is to purchase an insurance policy which covers these damages and claims. You might feel that getting another new policy is too expensive and not feasible. If that is the case, you need to check your old Commercial General Liability (CGL) insurance policy to see if environmental damages are covered as some of them still do cover them. But take note that most CGL policies today do not cover for damages arising from pollution as a result of escalating lawsuits recently involving penalties for environmental issues.

After the insurance companies have tried taking out environmental and pollution coverage from their CGL policies, they then tried to market their new product which is designed to provide protection to policy holders related to pollution and environmental problems. Some important specifications of the new policies include coverage for possible occurrence of site clean-ups of the harmful materials, damage to the related properties, damages incurred by third party's properties or physical damages or harm, any costs or payments incurred for the cleaning up of third party's property that is not considered as policy protected site and payments for cleaning up costs that is not owned by the policy holder, and any third-party claims for payments of transportation of products or toxic and chemical waste which are causing the pollution problems.

If you are thinking of purchasing and developing a brownfield site, which means the commercial site that has been left undeveloped because of its excessive pollution problems, take note that there are insurance companies willing to offer you coverage for these areas. If there is no insurance coverage offered for these sites, this land may be left undeveloped since the risks of incurring clean-up costs and the further financial payments in penalties is too high.

In order to cut down the risks involved, check with the local authorities regarding the laws and regulations regarding the pollution and environment concerning commercially run estates. Take note on your potential accountability in financial terms and also the legal requirements if something should happen to the buildings and estates near your property. If you find the law decree hard to understand always seek help from a lawyer who is well versed in the field of environmental laws. By acquiring the necessary knowledge, you can then decide if you need to purchase an environmental insurance for your property.