REIT Association Endorses AIG Environmental Program For Its Members

AIG Environmental, a division of the American International Companies, has introduced CLEAN REIT, an environmental insurance program endorsed by the National Association of Real Estate Investment Trusts (NAREIT) for its corporate members.

CLEAN REIT offers NAREIT's members a menu of insurance coverages that covers environmental risks associated with the owning or operating of a facility. Under the CLEAN REIT program, AIG Environmental has tailored its Pollution, Legal Liability Select coverage offerings to address risks specific to Real Estate Investment Trusts (REITs).

On-Site Cleanup and Diminution in Value Coverage, for example, covers unknown pre-existing and new pollution conditions that occur after policy inception for on-site cleanup costs arising at, within or under covered locations. Coverage is also provided for diminution in real estate market value of the insured property as a result of an on-site pollution condition discovered after policy inception.

CLEAN REIT also offers Business Interruption Due to Pollution Conditions Coverage, which covers the loss of rental value and extra expenses resulting from the interruption of the insured's business operation due to on-site pollution conditions. Under the program's business interruption coverage, NAREIT corporate members are provided with a reduced deductible requirement of four days and elimination of the standard coinsurance requirement.

Additionally, CLEAN REIT offers special features including an option to purchase compliance underground storage tank coverage, coverage for the insured against tenant pollution and optional coverage for asbestos release for properties with an asbestos operation and maintenance (O&M) program.

Healthcare REITS can also choose coverage that expands the definition of pollutants to include medical waste. Coverage for low-level radioactive waste can be added by endorsement.

"We're pleased to provide NAREIT corporate members this select program," said Joseph L. Boren, president, AIG Environmental. "Not only does CLEAN REIT help bridge the 'pollution gap' and provide assurance that funds may be available in the event of an unexpected environmental mishap, but it also helps strengthen a REIT's financial position by replacing or supporting commercial lender-required indemnities and alleviating commercial lenders' fears."