Aon builds its Green credentials
Despite most insurers’ tendency to view environmentally-friendly construction with caution, Aon has made the move to cover green components in commercial and industrial properties.
The Aon Corporation Green Property program is being offered as an enhancement to its Global Property Policy, whether or not properties are environmentally certified.
It enables property owners to upgrade to certified green building components and promises reimbursement for their full repair or replacement.
The move comes as insurance broker Marsh released a report that found many leading commercial property and casualty insurers were reluctant to provide specialised coverages or program enhancements because they considered green building projects more risky than traditional construction.
The Marsh report said the property and design professional liability insurance markets had been the first to develop enhanced coverages or provide specific risk management advice around the green-built environment.
However, property and casualty insurers remained on the sidelines as they worked to determine the extent and types of exposures that might evolve from these new projects.
Aon has no doubt where it stands. It says it will insure the materials and development of each property meeting local mandates for green building, as well as recognised standards such as the US Green Building Councilâ€™s Leadership in Energy and Environmental Design (LEED) certification and the European Unionâ€™s directive on energy performance of building.
Coverages include additional costs to repair or replace property, electrical or electronic equipment to meet LEED requirements, the Green Globes Assessment and Rating System of the Green Building Initiative, Energy Star qualifications or other equivalent US and overseas requirements.
Peter Breitstone, CEO of Aonâ€™s Environmental Services Group says businesses face several challenges in green building development, including zoning and building code issues as well as finding the right insurance coverage for their property.
Marshâ€™s report into the green building environment in the US and the state of the insurance market place describes how insurers are responding to green building trends.
Catha Pavloff, a senior vice president in Marshâ€™s Construction Practice and leader of the firmâ€™s Green Building Risk Management Initiative says property underwriters are beginning to recognise the potential benefits of green buildings.
â€œBy and large, insurance companies are carefully monitoring the progress of green construction, the evolution of the contracts that define roles and allocate risks on these projects, and the reliability and durability of green materials and systems.â€?
Marsh is advising businesses seeking insurance for green facilities to be sure they determine proper values to avoid being underinsured or being charged too much premium.