In follow up to the information I emailed on the new Washington state law requiring environmental disclosure on commercial property transactions I received the following question/s from one of our agents.
Email from Agent:
Chris,
What is the average cost of this type of insurance? What is the rate based on? Is it something the buyer carries or the seller? Am I correct in assuming this would be a topic to discuss with real estate brokers, i.e brokers I know, as a way to establish a referral source?
Wendy
ERMI Response: This would be an excellent way to establish a referral source from real estate professionals, attorneys, environmental engineers, bankers, any profession that has an interest in real estate that could be impacted if there were an environmental liability associated with a commercial property transaction.
Minimum premiums for Property Transfer insurance with $1/$1 limits starts around $3,500 plus tax. We generally write these on a multi year term basis and will blanket multiple properties onto one policy if the insured has such an exposure thus reducing down the per location costs and spreading their exposure over all of their properties. Property Transfer policies are an excellent strategy to use on foreclosure properties.
Using the new law and environmental insurance as the door opener / wedge, sets you up to sell other P&C insurance to the commercial property buyer or professional.
Premium is based upon several factors the most important is quality Phase I and / or Phase II site assessments which will give the information the underwriters are looking for in order to rate a property. Some of the main factors affecting the premium are size of property, past use of property, current or future use of property, neighbors, any past contamination on the property or surrounding properties….
As for who pays for the insurance and who is covered that is negotiated in the purchase agreement and varies.
I have attached an application you can use for your insured and please contact Parker or myself to strategize in more detail on how this new Washington law can drive your sales.