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.

 
Legends Environmental Insurance Services ~ 130 Vantis, Suite 250, Aliso Viejo, CA 92656 ~ Lic # 0c79875 ~ Phone: 800.992.6999

© 2014 Legends Environmental Insurance Services. All Rights Reserved. Site Design by Accusites.com

Program Overview Page