Fireman's Fund Insurance Companies Offers Discount
for Green Buildings
A new insurance program is available that offers commercial building
owners discounts for green, sustainable buildings. Novato, Calif.-based
Fireman's Fund Insurance Companies developed certified green building
replacement and green upgrade coverage, which applies to buildings
that are green-certified, as well as buildings and facilities whose
owners would like to capture green benefits. Fireman's Fund worked
with the U.S. Green Building Council's (USGB) LEED program and the
Green Building Initiative's (GBI) Green Globes program to ensure
its coverage and upgrade options align with the industry's major
green certification programs.
"Our discount applies to the completed, certified green building,"
says Steve Bushnell, product director for Fireman's Fund. "We do
not offer a discounted price for the builder while the building
is under construction. The certified building discount (5 percent)
is the same for all LEED ratings, and is based largely on commissioning
which is a prerequisite for any LEED certification." Under the program,
commercial property owners and managers can receive insurance discounts
for rebuilding and/or replacing building materials with green alternatives,
"Glazing is a key component of energy-efficient and green buildings,"
"We will insure glazing and, following a covered loss, pay to replace
the glazing in any building with materials comparable to those in
place prior to the loss. We recognize that glazing is part of the
overall building envelope and works in conjunction with the rest
of the envelope system and HVAC system to produce an energy-efficient
building. We did not include glazing in our upgrade form recognizing
that you cannot replace 'ordinary' glazing with 'green' glazing
and not make modifications to the HVAC as well."
Through the program, Fireman's Fund will pay for the application
process for the building to become certified by either the USGBC
or GBI. For green buildings, the program covers sustainable building
elements, such as certain glass products, and in case of total loss,
will cover for rebuilding to be green certified.
Bushnell says Fireman's Fund realizes several benefits from this
program, including a view that green buildings are better insurance
risks (safer) than traditional buildings. "Our most frequent cause
of loss for commercial real estate is electrical fires, followed
by plumbing and envelope water leaks and HVAC issues," he says.
"Commissioning addresses all of these systems. We anticipate that
we will pay [fewer] losses for green buildings than traditional
He also says green buildings make good business sense. "We believe
that green buildings are now mainstream. Industry literature makes
a convincing case that green buildings produce higher net operating
income, have higher asset value, produce a healthier, more productive
indoor environment and are more attractive to tenants than traditional
buildings. These factors make them better insurance risks."
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