Posted in Construction Insurance, Environmental / Construction Professional and Pollution Insurance, Environmental Insurance

Insurance for Property Developers: A Complete Guide From Distinguished

November 13, 2023 / Distinguished

In the sprawling expanses of modern cities and towns, the fingerprints of developers are everywhere. From towering skyscrapers to quaint residential communities, their visions transform landscapes and lay the foundation for the future. However, in the fast-paced development world, unforeseen environmental challenges can quickly lead to significant financial setbacks.

That’s where Environmental and Construction Professional insurance comes into play. These insurance policies can help safeguard against unexpected environmental and construction professional exposures that can quickly derail a project. 

In this guide, we’ll talk you through what coverages Distinguished can offer your property development clients, how much that might cost, and why you should partner with Distinguished for all your environmental and construction insurance needs.

What Environmental and Construction Professional Insurance is available to a Property Developer?

Insurance needs for property developers are broad and may encompass several different insurance policies. Coverages vary from those addressing professional exposures from third-party claims to the cost of cleaning up mold or unknown historic pollution at the development site.

At Distinguished, we offer four insurance policies that can help cover the gamut of different exposures your clients may face. 

Owner’s Professional Protective Indemnity (OPPI)
Pollution Legal Liability Plus (PLLP) 
Contractor’s Pollution Legal Liability Plus (CPL)
Contractor’s Pollution and Professional Legal Liability Plus (CPPL)

Here’s a brief rundown on how each of these policies can help cover your real estate development clients. 

1. Owner’s Professional Protective Indemnity

With OPPI, your clients who own a development project will get the following coverages:

Indemnity Coverage: Provides coverage in the event of a protective loss arising from an act, error, or omission in the rendering of subcontracted design services or from a pollution condition resulting from subcontracted contracting services.
Professional Coverage for Third-Party Claims: For claims arising from an act, error, or omission in the rendering of subcontracted design services.
Occurrence Pollution Coverage for Third-Party Claims: Covers pollution events caused by subcontracted contracting services, non-owned disposal sites, and transportation.

OPPI will also cover your client for certain expenses like ADA and FHA Expenses, Bankruptcy Litigation Expenses, Building Information Modeling Expenses, Disaster Management Costs, Subpoena Expenses, and Litigation Expenses. Plus, OPPI will also act as a credit towards SIR for the use of approved mediation.

Learn more about our OPPI policy on our Owner’s Professional Protective Indemnity product page. 

2. Pollution Legal Liability Plus (PLLP)

With PLLP, your clients will get the following coverages: 

Clean-Up Costs, Bodily Injury, Property Damage, and Legal Expense: Coverage for new and/or historical pollution conditions on, at, under, or migrating from or through a covered location.
Mold and Legionella: Coverage for mold matter and legionella pneumophila.
Business Interruption: Covers instances where covered events result in a business interruption, including contingent business interruption and delay costs for new pollution conditions.
Emergency Clean-Up: Coverage for clean-up costs incurred on an emergency basis.
Legal Costs: Covers legal costs resulting from a pollution event (additional legal costs may be provided outside the limit).
Occurrence Coverage for Contracting Services: Provides coverage if the insured’s contracting services cause a pollution event at a job site.
Asbestos and Lead Coverage: For bodily injury and property damage from asbestos-containing materials and lead-based paint.

PLLP will also provide coverage for Disaster Management Costs and Subpoena Expenses in instances of a pollution event. 

You can learn more about our PLLP policy in our guide to Pollution Legal Liability insurance or our PLLP product page. 

3. Contractor’s Pollution Legal Liability Plus (CPL)

With CPL, your clients will get the following coverages:

Clean-Up Costs, Bodily Injury, Property Damage, and Legal Expense: Coverage for pollution conditions arising from contracting services.
Third-Party Pollution Coverage: Provides occurrence pollution coverage for third-party claims.
First-Party Pollution Coverage: Provides clean-up coverage if a pollution event is discovered by the insured.
Emergency Clean-Up: Coverage for clean-up costs incurred on an emergency basis.
Mold and Legionella: Coverage for mold matter and legionella pneumophila.
Indemnity Coverage: For pollution protective loss arising from a pollution condition or indoor contaminant condition resulting from subcontracted contracting services.
Business Interruption Coverage: Covers the costs accrued due to business being put on hold due to a pollution event, including at owned locations and contingent business interruption coverage at job sites.
Facility Coverage: Includes coverage for owned locations and equipment yards.
Occurrence Coverage for Non-Owned Disposal Sites and Transportation: Will cover pollution events that occur in transport between sites or at non-owned disposal sites. 
Legal Costs: Covers legal costs resulting from a pollution event (additional legal costs may be provided outside the limit).
Specialty Expenses Coverage: Includes coverage for Bankruptcy Litigation Expenses, Disaster Management Costs, Subpoena Expenses, and Litigation Expenses.

4. Contractor’s Pollution and Professional Legal Liability Plus (CPPL)

With CPPL, your clients will get the following coverages: 

Professional Liability Protection: Safeguard against errors, acts, or omissions stemming from professional services.
Legal Costs: Covers legal costs resulting from a pollution event or professional claim (additional legal costs may be provided outside the limit).
Pollution Event Liability: Coverage for third-party claims related to pollution incidents.
Self-Discovered Pollution Incidents: Protection for pollution events identified by the policyholder.
Emergency Clean-Up: Coverage for clean-up costs is provided on an emergency basis.
Claims from Mold and Legionella: Coverage for claims linked to mold and legionella issues.
Indemnity for Subcontracted Work: Insurance for losses linked to subcontracted services involving indoor contaminants or pollution scenarios.
Business Interruption: Coverage for costs that result from a halt in operations at owned sites, with contingent protection for disruptions at work sites.
Protection for Owned Facilities: Insurance for proprietary places such as equipment parks and similar establishments.
Occurrence Coverage for Non-Owned Disposal Sites and Transportation: Will cover pollution events that occur in transport between sites or at non-owned disposal sites. 
Specific Litigation Coverage: Insurance that encompasses Bankruptcy Proceedings, Crisis Management, Subpoena-Related Costs, and SIR bonuses for sanctioned mediation sessions.
Extended Legal Expense Coverage: Supplementary insurance for legal fees exceeding the set limit.

You can learn more about our CPPL policy in our guide to Contractor’s Pollution Insurance or our CPPL Product Page. 

Who Needs Insurance for Property Development?

Any real estate developer or related contractor should consider some combination of the above policies based on their needs. This is especially true for any projects requiring subsurface soil work, as there is a higher likelihood of causing or discovering a pollution event that needs cleaning up.

For instance, a recent redevelopment project was handed a pollution remediation bill that could exceed half a million dollars due to a historic pollution event. In this case, the developer found contaminated fill materials under the building they had just demolished.

Interested in learning more about the kind of environmental claims a property developer may face? Here’s a list of possible environmental claims scenarios you and your clients may be interested in reading through.

What Are the Advantages of Getting Developer’s Insurance Through Distinguished?

At Distinguished Programs, our property development-related insurance policies have comprehensive coverages your clients need at competitive prices they’ll love. 

However, if you partner with us, that’s just the start of what we can offer you. When you partner with Distinguished for your property developer clients, you’ll also get access to: 

Easy Claims Processing: Having one carrier instead of several carriers should make claims handling more efficient because you don’t need to deal with finger-pointing as each carrier tries to blame the incident on a different cause, be it a design error, contracting error, or site operational error. 
Premiums Savings: When multiple policies are linked together, we can provide premium savings where they overlap. 
Speed: Redevelopment deals are often fast-moving, and our dedicated team can respond quickly and efficiently to keep your project on track.
Experience: Our team of underwriters are some of the most experienced in the industry, so we can offer your clients technical underwriting that ensures each policy is tailored to your client’s needs.
Quick Claims: Because we have in-house claims attorneys, we’re able to respond to claims quickly, often within 24 hours.

Get Started With Distinguished Today

Another advantage of Distinguished is that getting started with us is a quick and simple process. If you’re interested in getting a quote for one of your developer clients, all you’ll need to do is register your agency (if you’ve not already done so) and then complete an application form and forward it to Doug Stepenosky at DStepenosky@distinguished.com.

If you have questions about one of our Developer’s Insurance policies, don’t hesitate to reach out to our support team or learn more with any of the resources below:

Developer’s Insurance FAQs

What are the maximum terms you can offer for development policies?

We can offer project policies up to seventeen years in total coverage (five-year term plus completed operations per state-specific statutes up to twelve years) for both owners-controlled contractor’s pollution and OPPI, with site pollution offerings available at terms up to ten years.

How Much Does Developer’s Insurance Cost? 

For OPPI: Premiums start around $40,000

For PLLP and CPPL: Redevelopment projects typically start around $25,000, although these are not hard minimums.

For project CPLs: Premiums start around $10,000, depending on project revenues, limits, and ERP or Completed Operations Period term, among other factors.

About Distinguished Programs

Distinguished Programs is a leading national insurance Program Manager providing specialized insurance programs to brokers and agents with specific expertise in Fine Art and Collectibles, Environmental and Construction Professional, Executive Lines, Inland Marine, Real Estate & Builder’s Risk, Community Associations, Surety, Hotels, and Restaurants. Property and Liability products are distributed through a national network of agents and brokers. Serving the same core markets and partnering with the most stable and reputable carriers, Distinguished’s high-limit Umbrella programs remain the clear choice in its area of specialty for superior coverage, competitive pricing, and attentive service. Through thoughtful innovation, stemming back to 1995, Distinguished Programs fosters growth and opportunities for its brokers, carriers, and employees.

View a full list of our programs and submit business with Distinguished.

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