Insurance can protect banks when foreclosed properties are contaminated

06/4/2013 | Business Insurance (tiered subscription model)

Banks can turn to environmental insurance and step up their due diligence to guard against liability for cleanups of contaminated foreclosed properties, experts said. In such cases, banks can be held liable under the Superfund law for cleanup costs if they have assumed a management role in the foreclosed property. As an alternative to buying pollution-legal-liability or environmental-impairment-liability insurance, some banks are being named as an insured under a borrower's policy, although borrowers sometimes request that banks purchase the insurance, said Veronica Benzinger of Aon Risk Solutions.

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