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It's a loan officer’s most serious concern:

A borrower defaults on a commercial real estate property-backed loan and the collateral property has become environmentally impaired. Costs to the lender can quickly escalate when it loses the unpaid loan amount, plus interest and fees. After foreclosure, the lender also faces the cost of cleaning up the contaminated property and possible third-party bodily injury and property damage claims arising from the proximity of the property.

This worse case scenario is not unusual, even when a lender does everything by the book. A lender should adhere to stringent loan underwriting guidelines and conduct Phase I environmental site assessments to identify any possibilities of environmental risk or impairment. It may also develop environmental policies and procedures in an attempt to manage such environmental risk. It could also require financial collateral, including indemnities or escrows from the borrower, to help manage further the potential environmental exposure.

However too often, hindsight shows that all of these risk management methods only added time and expense to the loan approval process. Thus the lender still lacked the risk management tool it most urgently needed: sound environmental risk transfer protection.

Built on experience

Over a decade ago we've worked with the carriers to craft a solution that decisively addresses the environmental exposure associated with commercial real estate-backed loans – plus easing and speeding up loan processing. The result is Lender Environmental Protection, a policy that responds to the wish list from lenders nationwide.

Lender Environmental Protection enables lenders to:

• Shield assets by protecting collateral and insuring environmental liability arising from collateral properties
• Expedite loan processing and reduce costs by minimizing or eliminating traditional environmental due diligence
..processes
• Better manage cash flow in the event of a claim

Lender Environmental Protection is often purchased by the borrower for the benefit of the named insured lender.

Lender environmental protection

The worst environmental damage occurs slowly, seeping into the ground or water over time, and may go undetected for decades. This type of unseen hazard is the reason businesses need the protection of an insurer that has the staying power to be there when a claim occurs. In the long run, an insurer’s protection is only as good as its financial strength, that's why we only work with top A rated carriers.

The following is a list of the customer groups our program serve:

• Commercial banks
• Lenders and loan originators
• Financial institutions and investors

• Life insurance companies
• Pension funds
• Mortgage bankers

Coverage made to fit your risk

The policy provides collateral value protection in the event of a loan default and a newly discovered pollution event at the covered location. When this occurs, the policy can pay out one of two ways:

• The insured receives the lesser of the outstanding loan balance and extra expenses, or the estimated cleanup costs1.
• The insured receives the outstanding loan balance and extra expenses.

Additional policy highlights

• First-party cleanup costs for claims made after the lender has foreclosed on a covered location
• Third-party bodily injury and property damage claims, including defense costs, caused by a pollution event during
...the policy period
• A broad definition of default, including both monetary and technical default
• Coverage on a single transaction or master portfolio basis
• Multi-year policies, up to the term to maturity of the insured loan
• A waiver of subrogation against borrower in possession
• Assignment of interest may be assigned to a successor lien holder
• No minimum deductible is required.

Up to $25 million. Higher limits may be available subject to underwriting considerations.

Insuring agreements

These coverage's only apply if and to the extent specifically listed as provided in item 5 of the declarations.

A. Existing pollution event

1. First Party Cleanup Costs
We will pay “cleanup costs” to the extent resulting from an “existing pollution event” that is on, at, under or that is migrating or has migrated beyond the boundaries from a “covered location" if that "existing pollution event" is first "discovered" during the “policy period” and the "discovery" is reported to us in writing during the “policy period” or within sixty days following the end of the "policy period".

2. Third Party Liability
We will pay “loss” that an "insured" is legally obligated to pay as a result of a "claim" resulting from an "existing pollution event” in the "coverage territory", provided the “claim” is first made against the "insured" during the “policy period", and the "claim" is reported to us in writing during the “policy period”, within sixty days following the end of the "policy period" or during an optional extended reporting period, if purchased.

B. New pollution event

1. First Party Cleanup Costs
We will pay “cleanup costs” to the extent resulting from a “new pollution event” that is on, at, under or that is migrating or has migrated beyond the boundaries from a “covered location", if that "new pollution event" is first "discovered" during the “policy period” and the "discovery" is reported to us in writing during the “policy period” or within sixty days following the end of the "policy period".

2. Third Party Liability
We will pay “loss” that an "insured" is legally obligated to pay as a result of a "claim" resulting from a "new pollution event” in the "coverage territory", provided the “claim” is first made against the "insured" during the “policy period", and the "claim" is reported to us in writing during the “policy period”, within sixty days following the end of the "policy period" or during an optional extended reporting period, if purchased.

C. Crisis management expense

We will pay "crisis management expense" in response to a “pollution event” in the "coverage territory" that the "named insured" reasonably expects could give rise to "loss" or "cleanup costs" under the policy and subjects the "named insured" to significant adverse regional or national media attention. "Crisis management expense" must be first incurred by the "insured" during the "policy period".

Contact Us today to get your quote!



Proudly Serving our Customers Environmental Insurance needs, for over 25 Years and Counting..
Legends Environmental Insurance Services ~ 130 Vantis, Suite 250, Aliso Viejo, CA 92656 ~ Lic # 0c79875 ~ Phone: 800.992.6999
Legends Environmental Insurance Services, LLC.

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