Green Businesses Get Insurance Discounts

After a decade of touting the superior quality of Green Buildings, The Tower Companies, is the first company in the Washington DC region to receive a 5% discount on property insurance because the insurance industry says Tower’s green buildings are less risky.

On May 1, 2007, Tower signed a new insurance contract with Fireman’s Insurance Fund, which gave them a 5% discount on property insurance for The Millennium Building, Washington DC’s first green building, The Tower Building, the areas first new construction Green Building, and Blair Towns, the first LEED Certified apartments in the United States.

“We are thrilled that the insurance industry has recognized the fact that Green Buildings are not only healthier for tenants and the environment, they are also less risky, with air quality free of airborne pollutants because of use of non-toxic, low-odor paints and carpeting, Energy Star-rated electrical equipment, interior lighting systems that meet LEED requirements, water efficient interior plumbing, Energy Star-qualified roof and insulation materials, and engineering inspections of HVAC systems. Simply put, green buildings are a more sustainable asset because they are better built,” says Jeffrey Abramson, Principal of The Tower Companies.

“We perceive there is less risk in a building that is constructed with products and systems so state-of-the-art that they lower operating costs, increase resale (appraisal) values, create a healthier work environment, and provide an opportunity for greater worker productivity. Fireman’s Fund is very proud of our commitment to the environment and want to support businesses like The Tower Companies who are taking a leadership role in creating a healthier, more sustainable workplace,” says Steve Bushnell, product director at Fireman’s Fund.

In addition to coverage for existing Green Buildings, Fireman’s Fund offers an “upgrade package” that enables building owners to re-construct their buildings to LEED Certification standards in the event of a loss, even if the building wasn’t certified to begin with. Other companies and industries are quickly moving into the Green arena. In March of this year, Bank of America announced its commitment to dedicate $20 billion to financing green projects.

“We hope this well become the norm and premiums will continue to decrease because everyone is building green properties, particularly as the costs of Sick Building Syndrome continues to plague businesses with losses in productivity and increases in healthcare costs,” says Jeffrey Abramson.

Indeed it may, since one insurance company is broadening discount insurance to companies with sustainable business practices overall. Garnet Captive Insurance Services announced it is creating the first captive insurance program – “Green” – designed exclusively for companies that are committed to sustainable business practices.

“We believe that companies that have demonstrated a commitment to sustainability should have lower insurance risks,” says Andrew Cavenagh, President. “We expect the positive impact these companies have on their corporate cultures can translate into lower insurance liabilities, including stronger employee safety records.”

GREEN will offer workers’ compensation, general liability, and automotive liability insurance policies to qualified companies with combined premiums in excess of $250,000. The program is expected to be operational in the second half of 2007.

Companies that apply for membership to GREEN will be evaluated by Garnet and sustainable consulting firm DOMANI, based on factors such as risk profile, commitment to sustainability, and business needs.

Membership will be considered for companies that:

– Purchase or generate energy from renewable sources;
– Implement energy efficiency best practices;
– Set targets for reducing environmental impacts;
– Occupy LEED-certified buildings;
– Develop clean technologies and environmentally-friendly products;
– Provide services or products that support healthy lifestyles; and/or,
– Participate in environmental community outreach programs.

Membership in organizations that promote corporate citizenship, such as CERES and Business for Social Responsibility, and/or climate protection, such as the Chicago Climate Exchange or EPA Climate Leaders, will also be considered in evaluating potential members.

DOMANI will help evaluate membership applications based on the above criteria. The firm will also develop models to quantify relationships between sustainable business practices and insurance risks.

“We are currently defining sustainability metrics and screening methodologies for membership to the program,” said Blake Mackey, Manager in DOMANI’s Strategic Sustainability Services group. “We anticipate this program will be another verification of substantial bottom line benefits to be gained by companies committed to sustainable business practices.”

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Tower Companies
DOMANI Sustainability Consulting, LLC
Garnet Captive Insurance Services, LLC