Environmental pollution and contamination put a bank at risk when the property is purchased with a loan. Environmental factors can decrease property values causing the bank to potentially lose money. Bankers environmental risk insurance is both necessary and worth having for a few key reasons.
Both the OCC and the FDIC require banks to adhere to and uphold an environmental risk insurance policy. Bankers environmental risk insurance can protect banks from claims and financial losses due to:
- Pollution damage on insured property
- Commercial real estate loan default
- Pollution related cleanup costs
- Pollution related bodily injury or harm
No two businesses are alike, and neither are banks. Assessing the unique environmental risks posed to your bank can help you determine the right policy or policies necessary to cover your exposures. Overall risks depend on the types of loans given and the environmental risks of those properties. In addition to your bank’s risks, look into any changing regulations to keep your policy up to date.
Properly assess the risks your bank faces in regards to environmental concerns. Be diligent to get the right bankers environmental risk insurance policy that maximizes coverage. With the help of an agent, banks can cover their environmental liabilities and protect against unseen or unknown environmental issues on mortgaged properties.