ERIC PROPERTY TRANSFER LIABILITY INSURANCE PRE-APPROVED BY FLEET FINANCIAL GROUP
ERIC PROPERTY TRANSFER LIABILITY INSURANCE PRE-APPROVED BY
FLEET FINANCIAL GROUP
ENGLEWOOD, Colo., June 23 /PRNewswire/ -- Fleet Financial Group announced today that it will require environmental insurance on new and renewing commercial real estate loans. The insurance requirement is effective immediately at Fleet Bank-Rhode Island, where it will affect loans of $1 million or more. It will be implemented in all other Fleet banks by year end.
ERIC Property Transfer Liability Insurance is the only coverage that is pre-approved by Fleet as meeting all its insurance coverage criteria. ERIC Property Transfer Liability Insurance, introduced in mid-1991 by ERIC Group, Inc., was the first nationally available insurance coverage for liabilities associated with environmental contamination.
When fully implemented, Fleet's insurance requirement will help protect its $5 billion commercial real estate loan portfolio from liabilities associated with potential or pre-existing but undetected environmental contamination.
According to ERIC Group CEO Paul K. Freeman, "Fleet's move represents a significant milestone in reducing financial risk to commercial real estate borrowers and their lenders."
ERIC's research indicates that 12 percent of all non-industrial commercial property in this country has a contamination problem and two- thirds of these properties will require some sort of remediation. In addition, remediation costs often exceed the property value.
ERIC Property Transfer Liability Insurance protects property owners and financial institutions from Federal and state imposed environmental liabilities.
The insurance covers all expenses to the policy limit related to remediation, including due care and defense costs, remedial investigation/feasibility studies and on/off premises cleanup.
Environmental laws impose liability on commercial real estate owners and lenders for the cleanup of contamination on their properties, whether or not either party caused or contributed to the contamination.
While Fleet is one of the first U.S. banks to use insurance to reduce environmental liabilities, other banks are expected to follow suit. ERIC is involved in negotiations with 35 of the country's largest financial institutions, as well as property developers, trust companies, banks and insurance companies that are seeking environmental liability protection.
"We are finding that environmental liability is one of the major concerns among business executives," said Freeman. "Although environmental insurance is a rather new concept, it's readily being accepted as a solution to a growing problem."
Frank B. Hall & Co. of Rhode Island, Inc. is the program administrator for ERIC. In this role, Frank B. Hall will work with Fleet customers and their brokers who are interested in ERIC Property Transfer Liability Insurance. Frank B. Hall of Rhode Island is an affiliate of one of the largest insurance brokerage firms in the country.
ERIC Group, headquartered in Englewood, Colo., develops innovative insurance products to provide businesses with protection from environmental risks.
/CONTACT: Karen Scherger, 303-397-6789, or Kasey Geoghegan, 303-397-6741, both of ERIC Group/ CO: ERIC Group, Inc. ST: Colorado IN: INS SU: LD-LR -- NY003 -- 2780 06/23/92 10:35 EDT