In general, land conservation entities are designed to preserve the environment by establishing agreements between landowners that will protect environmental factors for tracts of land. These environmental factors may vary according to the goals of the land conservation entity. Examples of typical goals they ascribe to include:
- The protection of wildlife habitats and migration corridors
- The protection of lands for agricultural use
- The protection of property for value preservation
- The protection of property for recreation
- The protection of forests
- The protection of water quality
Environmental Concerns for Land Conservation Entities
Because the goal of these entities is to protect the environment, when something does go wrong or if these sites are contaminated, these entities have an elevated level of risk, not only from a financial standpoint, but also from a reputational perspective.
The following are some of the notable environmental concerns for land conservation entities:
- The properties that may be held by these entities are often in areas with valuable real estate, along water bodies, or in areas that have not historically been used for industrial purposes. They often include areas where property values are relatively high. If contamination is discovered on a property of this type, claims could be made against the conservation entity for property damage and cleanup costs. In addition, there would likely be a decrease in the value of the property once environmental concerns were uncovered, whether they were real concerns or ones that create a “stigma”* with respect to the property.
- Properties that land conservation entities hold often consist of multiple acres or large tracts of land that have not been occupied for years or investigated for environmental damage. This lends itself to the fact that there may have been historical, unpermitted waste disposal conducted on a site or activities that may have adversely impacted the site. If contamination is discovered, the conservation entity could be liable for cleanup costs and their reputation as an entity that upholds the goals of land conservation could be compromised.
- Properties that land conservation entities hold are often donated. If there is contamination discovered at any one of these properties, the cleanup costs could potentially be higher than the value of the land.
- Land conservation organizations often use easements as a means of achieving their land protection goals. These easements can be difficult to understand and over the years, may become outdated, or not in the best interest of the property owners that may have changed hands throughout the years. When a land trust has no choice but to sue a property owner in order to uphold the terms of an easement, they may be countersued by a property owner for property damage as a result of environmental exposures such as toxic tort claims, third party property damage, or cleanup costs.
Many of the above concerns can be addressed through placement of proper coverage on the subject site(s). Contact us for more information on land conservation entities and the insurance products that can address exposures.