Spotlight: Insurance for Land Conservation Entities

Land conservation entities work to protect the environment, so when something goes wrong or if these sites become contaminated, they may have an elevated level of risk, not only from a financial standpoint, but also from a reputational perspective.

The following are some 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. 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 or not they were real concerns or ones that create a “stigma” with respect to the property.
  • They 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 These easements can be difficult to understand and over the years, may become outdated, or not in the best interest of the property owners that may have changed hands throughout the years.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.

Insurance Solutions for Land Conservation Entities

Every property that a land conservation entity preserves is unique and will have its own set of challenges. Whether it is vacant land, a small tract of land, an easement in a populated area, or a portfolio of properties, the basic insurance product that can address environmental exposures at any of these locations is a Site Pollution policy, also known as a Premises Pollution policy, EIL, or PLL. This product is designed to provide coverage for third party property damage, third party bodily injury, and first party cleanup as a result of pollution conditions stemming from properties. It can also be endorsed to provide coverage for pollution events during the transportation of waste from covered locations to a disposal site and also for disposal at waste disposal sites.

In some instances, it might be appropriate to consider an Owner Controlled Contractors Pollution program, where the trust manages a policy extending to all contractors they allow on the site. While generally not as comprehensive an approach, there are times where it is a useful alternative to Premises Pollution.

For more information on land conservation entities, contact us.