NU Online News Service, Sept. 14, 1:00 p.m.EDT

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Insurance Services Office announced today that it has filed theinsurance industry's first standard coverage option for commercialproperty owners interested in rebuilding damaged property withgreen alternatives.

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Kevin B. Thompson, senior vice president of insurance servicesat Jersey City, N.J.-based ISO, said the new policy language means"ISO participating insurers will be able to offer their clients aninnovative coverage solution that taps into the current desire ofmany individuals and businesses to lessen their impact on theenvironment."

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Mr. Thompson remarked in his statement that, "Today, commercialbuildings are among the largest energy consumers and wastegenerators. Significant attention has been focused on how to reducethe impact of commercial buildings on the environment, and this newcoverage is designed to allow insurers to help their clientsaddress that issue."

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There are three major components of the new coverage. First,green upgrade coverage will augment existing replacement-costcoverage by providing an additional limit of insurance to addressloss settlement of damaged property using more energy-efficient,environmentally preferable materials, products, or methods indesign, construction, manufacture, or operation, as recognized by agreen standard-setter, such as Leadership in Energy andEnvironmental Design (LEED) or ENERGY STAR.

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The second component is related expense coverage, which providesan additional limit of insurance to be applied to expenses relatedto green upgrades.

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These include waste reduction and recycling costs, such as thereuse or salvage of building materials or contents and relatedextraction and transportation expenses.

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Other expenses include professional fees for the design andengineering of green upgrades as well as certification andequipment testing fees. Related expense coverage also providesbuilding air-out and air-testing expenses.

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The third new coverage option offers a business interruptionoption for those insureds with an underlying time-element policythat extends the period of restoration. This component recognizesthat reconstruction using green standards may take longer than iscustomary with ordinary construction methods and materials, ISOsaid.

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"The ISO green building upgrade will allow insurers to tap intothe growing trend of environmentally friendly rebuilding followinga loss and is designed to complement the existing portfolio ofcoverage options available through ISO's commercial propertyprograms," added Mr. Thompson.

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