Insurers Promote Green Rebuilding

Recognizing the durability benefits of green buildings, insurance company Fireman’s Fund began offering green rebuilding policies for commercial properties in 2006. These policies cover the cost premium for adding green features when a building is repaired or replaced. Covered upgrades include efficient lighting and plumbing, vegetated roofs, and finishes with low levels of volatile organic compounds as well as certification through a program such as LEED or Green Globes.

Now three other insurers, Travelers, ACE USA, and Lexington Insurance, are offering similar green upgrade coverage for commercial buildings. One company, Lexington, introduced a residential policy in November 2007; the policy adds 3% to the cost of standard coverage. Another form of green building policy, available from some insurers, will compensate owners of damaged renewable energy installations not only for the cost of the equipment itself but also for the interruption in revenue from selling electricity to the grid and for the cost of purchasing electricity while the system is offline.