Lexington Insurance Co. says its CarbonCover ODS productmeets the emerging needs of the climate change and greenhousegas emissions sector.

CarbonCover ODS responds to direct physical loss or damage of aphysical asset that is being collected to create carbon offsetcredits. These assets can include ozone depleting substances (ODS)removed from refrigeration systems, or methane gas that isextracted from landfills or underground mines.

“The unique loss valuation structure of CarbonCover ODS allowsproject developers to protect against lost income they could sufferwhen they are using property with relatively low replacement costvalue to create a higher-value carbon offset credit–and thatproperty is lost or damaged during the process,” says a statementform Erik Nikodem, executive vice president at LexingtonInsurance Co., a unit of Chartis.

Direct physical loss or damage to the asset is measured asthe value of the carbon offset credits that would have been issuedfor the destroyed asset absent the loss, in accordance with acarbon registry's project protocol.

“Traditional property policies don't respond to the true valueof the insured's loss,” Nikodem adds.

CarbonCover ODS is the third product in Lexington's CarbonCoversuite of insurance solutions. The suite also includesCarbonCover Registry, which provides professional liabilityinsurance for registries that track, confirm, and verify carbonoffset credits; and CarbonCover Design & Confirm, which extendsLexington's architects and engineers professional liabilitycoverage to expressly cover claims arising from greenhouse gasconsulting services or emission reduction verificationservices.

More information can be found in the EcoSurance episode ofLexTV.