Lending institutions can now approach commercial real estate lending confidently,
without fear of environmental liability, with the Secured Creditor Impaired
Property Policy. A policy specifically designed to protect the lender from
financial loss due to defaults accompanied by environmental conditions.
The Secured Creditor Impaired Property Policy
was developed with the demands of the commercial lender in
mind. The policy's structure and versatile characteristics
allow it to adapt to the specific needs of a variety of lending
institutions accommodating varying lending practices and
Lenders benefit from using insurance as
a mechanism to address environmental liability because efficiencies
are achieved in the credit review and loan approval process.
This is true for single site transactions, portfolios and
securitization. Now, holding true to its principles, the
Secured Creditor Impaired Property Policy has been modified
to offer broader coverage, more options, and can be more
easily customized to mend a lender's coverage needs.
• Large Commercial Banks
• Community Banks
• Capital Market Lenders
• Investment firms
• Specialty Lenders
• Insurance Companies
Secured Creditor pays the outstanding loan
balance when a default occurs and an environmental condition
exists. The loan balance only coverage benefits lenders as
it protects them against their primary exposure and liability
concern while eliminating the need to manage defaults. Until
now, default was limited to nonpayment of a loan; however
in to provide maximum coverage to banks, the Secured Creditor
Impaired Property Policy has broadened this definition to
include "technical" defaults - the violation of
any provision of the loan agreement which causes the loan
to default Secured Creditor has been utilized in large securitizations
and has been looked upon favorably by the rating agencies.
In most cases this method of environmental
liability protection has improved the credit rating Pursuing
borrowers for recovery of losses when they default on a loan
can jeopardize the status of additional loans that the borrower
may have with the bank - often making a bad situation worse.
Secured Creditor Impaired Property Policy waives all rights
of subrogation against the borrower except the right of foreclosure
(meaning the insurer will not pursue the borrower for recovery
of losses) thereby protecting the bank and aiding in the
prevention of additional defaults. Some insurance policies
behave as a secondary coverage - assisting only after other
policies have taken effect. Secured Creditor Impaired Property
Policy responds immediately in the event of a loss - acting
as a primary source of protection.
Coverage A, for loss arising from a default
accompanied by an environmental condition on a commercial
real state loan secured by an insured property, the policy
will pay the outstanding loan balance. As another alternative,
by endorsement, Coverage A can pay the lesser of the outstanding
loan balance or cleanup costs.
Coverage B responds to legal obligations
and claims for third-party bodily injury, third-party property
damage and clean-up costs resulting from on- and off-site
pollution conditions at insured properties.
Coverage C, which protects the bank after
foreclosure, responds to clean-up of on-site pollution conditions
at insured properties. Fast turn around - while a environmental
site assessment can take 3-4 weeks, approval for Secured
Creditor insurance will take no longer than 5 business days.
Policy terms of up to 20 years. Can act
as an alternative for environmental site assessment. Can
be used to support securitization of loan pools. Loss has
been expanded to include accrued interest from date of default,
interest on advances and advances for property protection.
Natural resource damages are defined and covered in the definition
of property damage. 45-day loss reporting requirements. Policies
are available for single site transactions, securitizations
Secured Creditor Application - Single Site
or Portfolio Application
Products Minimum/Maximum LIMIT PER OCCURRENCE
Contact Us today to get your quote!