Environmental issues and green construction have a few points ofintersection in the insurance marketplace. When it comes torisk exposure, green construction techniques—new types of buildingmaterials, natural roof coverings, or even indoor waterfeatures—have raised concerns about how those components mightimpact mold, air quality, and other potential environmentalissues.

When it comes to coverage for green construction, severalenvironmental insurers have made options and endorsements availableto cover the cost of LEED-certified upgrades connected to cleanupand restoration.

“Four to five years ago, all anyone wanted to talk about wasgreen. We used to get calls all the time about how to price greenendorsements based on the cost to retrofit commercial properties.But in the past year and a half it's been eerily quiet,” says SteveBrewer, senior vice president of underwriting solutions at MSB,which provides pricing data for green building as part of itsproperty-valuation solution.

The reason carriers have quit calling with questions is notbecause there is less interest in sustainable building. “Newbuildings are being built to greener standards. We are seeing anincrease in renovation to green,” says Norrine Brydon, vicepresident of data asset and research at Marshall & Smith/Boeckh(MSB), a provider of building-cost data to the property insurance,appraisal, tax assessment, real estate and lending sectors. “Thereare more federal, state, and local mandates that have taken effect,such as CALGreen [the California Green Building Standards Code of2011].”

Rather, carriers have become more comfortable with offering andpricing for the coverage. “When regulations started coming intoeffect, carriers had a fear of the unknown,” says Brydon. “Asinsurers got their heads around the changes and as green buildingmaterials and construction techniques have become more common, theybecame a lot less concerned about it.”

“Carriers are definitely using green endorsements as acompetitive factor. They're getting smart about what 'green'means—what [construction] items are heavy financial impacts andwhat ones aren't,” adds Brewer. “A few years ago, it was a hot fadthat everyone wanted to learn about. Now, it's just part of howconstruction upgrades are done.”