April 29, 2016
From condominiums to office buildings to mixed-use properties, the dramatic increase in claims triggered by environmental incidents is affecting real estate properties of all types. Unexpected clean-up costs, regulatory fines and penalties, third party lawsuits, rental income loss, devalued properties and reputational damage are the direct causes of financial loss.
Clean-up costs of pollution events in particular have increased drastically in recent decades. For example, the cost to remediate 126,000 polluted groundwater sites monitored by the U.S. federal government—due to contaminants from underground storage tanks, military installations and industrial facilities—could range from $110 billion to $127 billion.
In addition, as environmental legislation and case law continue to change rapidly, real estate companies are finding it even more difficult to stay abreast of the environmental risk landscape. As a consequence, today’s real estate companies have urgent need for comprehensive environmental risk management that fully addresses their complex and evolving exposures.