Real_estate_bld_145x135 Seriously, yet another reason to build green buildings.  The list gets longer and longer.  Lower operating costs, higher resale (appraisal) value, healthier work environment, and better workforce productivity, etc.  Wells Fargo wants to finance green buildings and Hines wants to develop them.  And now, California-based Fireman’s Fund Insurance Company wants to insure them.  This is a smart business strategy.  If you’re going to insure something, why not insure the top quality stuff?  As insurer, you’re dealing with the elite, upper echelon of building developers, operators, and owners.  It’s really a no-brainer…

The company will provide green coverage for commercial buildings certified as environmentally friendly in all 50 states starting in late October 2006.  It’s the first insurance company to do so and will offer three different forms:

  1. Firemans_fund_logo 5% discount on insuring buildings certified by programs such as USGBC’s LEED process;
  2. Insureds that suffer a loss will be able to replace the loss with green products and systems (even if slightly more expensive);
  3. Commissioning–provides a post-installation inspection of systems put in after loss of more than $10k. 

Because there aren’t that many green buildings, relative to standard-code buildings, option #2 looks to be the most promising to future insureds.  Who wouldn’t want to be able to replace loss with top-notch, green systems and products? 

What this really comes down to, however, is another cost category that lowers costs for whoever is stuck with the burden of insurance. With energy efficiency, one can lower the energy bills.  With efficient design, one can lower bills and gain value in heightened productivity. With lower insurance costs, one can put more money in other areas or investments.  Unfortunately, only the smartest and most agile real estate firms are going to carpe diem and capitalize…they’ll also keep making money in the market, too. 

Extra Links:
Insurance Industry Sees Real Value in Offering Discounts to Green Building Owners [Alison Ryan – BD+C]
Insurance Companies Take on Global Warming [Marc Gunther – Fortune]