Risk Wary Companies Reject Environmentally Challenged Property Deals

Compiled ByDeborah Austin Pressured by proliferating rules, U.S. businesses are shunning properties with potential environmental damage, suggests a survey conducted on behalf of Chubb Environmental Solutions, New York. Of the 141 companies' senior finance executives who responded, 52% say environmental risk has convinced them not to purchase a property. Thirty-three percent overall -- and 60% of heavy manufacturers -- have had business transactions fail due to unresolved environmental issues. Top causes overall for business transaction failure include refusal to clean up contaminated property (59%) and failure to disclose contamination (29%). Over the past decade, federal agencies alone have enacted more than 50 new environmental rules -- with increased pressure for accurate disclosure boosting environmental compliance and risk as priorities, says Chubb Environmental Solutions President Michael Murphy. In fact 57% of respondents say they've boosted compliance budgets this year. Thirty-five percent have been investigated by a state or federal agency over environmental concerns. Chubb Environmental Solutions offers insurance underwritten by member insurers of the Chubb Group of Insurance Cos.