American International Group unveiled a new, environmentally-friendly insurance product last week that gives commercial property policyholders coverage for a "green" rebuilding job.

The insurer said its Lexington Insurance Company unit is now selling "Upgrade to Green Commercial," which allows policyholders to rebuild an insured structure and replace personal property with "products that embrace sustainability principles and reduce the overall impact of the building on the environment."

The product is available as an endorsement to Lexington Insurance Company's commercial property insurance policies and is the latest addition to Lexington's suite of "EcoSurance" products, the company said.

The products, the insurer explained, were developed to promote environmentally-friendly practices and to respond to changing market needs.

"Commercial property owners and developers are looking to improve the environmental performance of their properties," according to George Stratts, Lexington's division executive and executive vice president, who said the carrier is "committed to supporting the real estate industry's drive toward environmental sustainability..."

He added that the new product is "designed to help commercial property developers and owners meet burgeoning environmental regulations."

Upgrade to Green Commercial coverage responds to covered partial and total losses for both Leadership in Energy and Environmental Design (LEED)-certified and non-LEED-certified buildings.

In the event of a total loss, LEED-certified insureds will be allowed to upgrade their building to the next level of LEED certification upon reconstruction. Non-LEED-certified insureds can use the coverage to rebuild to a LEED silver standard.

In the event of a partial loss, the coverage focuses on four areas of interest to commercial property owners: energy efficiency, water efficiency, indoor air quality and sustainability.

The company said the coverage also encourages the use of Energy Star-qualified office equipment, including light industrial heating and cooling systems and lighting systems to reduce energy costs.

Also covered are interior building components such as paints, primers, adhesives, architectural coatings and composite wood partitions, counters, cabinets, systems furniture and seating that have reduced emissions of organic compounds to improve indoor air quality as well as cabinets, molding and flooring materials made of bamboo, eucalyptus, or other materials that are rapidly renewable or sustainably produced.

The coverage also includes expenses for recycling during reconstruction and at the time of loss.

To further enhance indoor air quality after reconstruction has been completed, the coverage allows insureds to conduct a period of indoor air testing and increased outdoor air ventilation of the reconstructed space using new filtration media to remove construction contaminants in accordance with LEED protocols.

Customers with the endorsement on policies can retain a LEED-accredited architect or engineer to participate in the design or construction of a damaged facility.

The coverage will also pay registration and certification fees imposed by the U.S. Green Building Council (USGBC) if a LEED-certified building needs to be recertified.

More information about the product is available by contacting Michael Reid at michael.reid3@aig.com or 617-330-8429.

Special Reports /

Lexington Goes Green For Property Cover

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