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REMEDIATION of contaminated
soil and groundwater is expanding under federal,
state, local, and voluntary cleanup programs.
The ECI program protects REMEDIATION contractors,
lenders and owners of contaminated property against
the possibility to cleanup costs vastly exceeding
cleanup cost estimates.
A unique feature of ECI
is the use of a pre-approved reimbursement schedule
once coverage is triggered. The reimbursement
schedule functions as a built-in SIR (Self-Insured
Retention) thus ensuring that neither the site
owner nor REMEDIATION contractor has to fully
fund a cleanup cost overrun.
Other REMEDIATION
insurance products contain a traditional SIR
stop-loss attachment point exceeding a percentage
of the cleanup cost estimate that the owner must
fully fund (a substantial amount for a large
cleanup).For property transactions, ECI
and SLEEP offer major advantages over traditional escrow
funding for REMEDIATION or uncertain environmental
liabilities. |
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Instead
of fully funding a cleanup under an escrow account,
ECI coverage may be purchased at a fraction of the
cleanup cost, thus freeing capital for more productive
uses.
A major advantage to using SLEEP coverage with guaranteed cleanup cost protection
is to protect against reopener for known pollution conditions and against cleanup
or liability for new pollution conditions.
"Brownfield’s" and other contaminated properties represent a seriously
underutilized resource. Environmental liability is the one impediment to the
reuse of these properties. Property owners, investors, prospective purchasers,
regional and private developers, and secured creditors are concerned with liability
associated with REMEDIATION of contaminated property and the long-term liability
for pollutants remaining on the property once the cleanup is completed.
Governments are realizing that cleaning up every contaminated property in the
U.S. to pristine conditions is not necessary to protect human health and the
environment, and it is not economically viable. State regulatory changes include
risk-based corrective action, voluntary cleanups (including "Brownfield’s" properties)
with a change in the government's role, and privatization of cleanup programs.
These efforts are beginning to impact site cleanups and may reduce the number
of sites requiring total cleanup and flatten or reduce REMEDIATION costs. Risk-based
approaches are also being considered for RCRA Corrective Action projects and
some CERCLA-related actions. |
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Lomax Solutions, LLC.
P.O. Box 307 Blue River, Oregon 97413
Phone: 714-955-1560 |
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