Lender Environmental Insurance Overview

Traditional due diligence for lenders can be a long and expensive process, and it doesn’t address pollution issues that arise after loan closing or any liability if the borrower goes into default and the lender finds themself in possession of a contaminated property.

Lender Environmental insurance was developed as an alternative and/or enhancement to traditional due diligence by transferring the risk of potential pollution incidents from lenders. Coverage is designed for lenders who originate, hold and service commercial real-estate backed loans.

Submissions and inquiries can be sent to: info@lenderenv.com

How Coverage Works

Lender Environmental offers commercial lenders an insurance solution to address environmental liability. Coverage protects against three main exposures:

Loss of collateral value in the event of a loan default accompanied by a pollution condition

With a default accompanied by a pollution condition; coverage would pay the lesser of the loan balance or the cost of clean-up subject to policy limits

Third-party pollution liability claims against the lender with or without a default

Claim alleging bodily injury or property damage resulting from a pollution condition at, or from, a covered collateral property; coverage would pay damages and defense expense subject to policy limits

Discovery of a pollution condition at a foreclosed or lender owned property

With the discovery of a pollution condition at a covered lender-owned property; coverage would pay for the cost of cleanup subject to policy limits

Policy Options

Lender Environmental can be designed to meet the needs of each individual lender. Coverage can be structured for either a single transaction or on a portfolio basis.

Single Transaction Policy

Single transaction policies are used for lenders who don’t have a portfolio policy or who have loans that don’t qualify to be added to one.

With this policy, coverage is provided for the collateral property or properties securing an individual loan. It is underwritten to the environmental and financial risk of a given deal.

Learn More

Portfolio Policy

Portfolio policies help lenders address environmental liability on a large number of their loans. The lender is the named insured and each loan approved for coverage is added to the policy at closing.

LEIS developed a state-of-the-art portfolio program that helps lenders significantly speed up the process and reduce costs.