fireman's fund green-gard commercial insurance program

Green CoveragesGreen Coverages

Fireman’s Fund Fireman’s Fund Green-GardGreen-GardCommercial InsuranceCommercial Insurance

Program Program


Fireman’s Fund Insurance Company has developed three new commercial insurance coverages addressing “Green” buildings!!

• Certified Green Building Coverage

with a premium discount• Green Real and Personal Property Upgrade

• Coverage Building Commissioning Expense

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Why is Fireman’s Fund interested in Green Coverages

Profound economic value proposition; businesses can improve their cash flow, operating income and asset value by going green.

Green coverages enhance Fireman’s Fund’s reputation as a differentiator.

Green Buildings are better risks.

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Climate change poses tremendous risks to the insurance industry. Green buildings reduce Greenhouse Gas (GHG) emissions. Allianz/WWF Climate Change Report addresses this issue in depth.

Hurricane

Flood

Drought

Changing weather patterns

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Green Coverages – Value PropositionGreen Coverages – Value Proposition

Economics of Green Buildings:Energy efficientWhen a building reduces energy use by 30%, the net operating income will increase by 5%. (EPA 2001)

Water efficient. Cost and availability of water west of Mississippi River and large urban areas is fast approaching crisis.

Lower ongoing operation and maintenance costs

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Economics of Green Buildings:Tenants want green space

Improved indoor air quality (IAQ).Thermal ComfortDaylightingProductivity

Increased retail sales

Green Buildings lease fasterSome data suggests they command higher rents

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While the looming shift to green buildings brings many benefits to companies, it also brings massive obsolescence to hundreds of billions of dollars in existing commercial space in the US and worldwide. "The owners of standard buildings must act now to protect their investments," says Charles Lockwood. The impact of green going mainstream will be as profound on commercial real estate as the invention of central air conditioning in the 1950s and 1960s, or elevators in the 19th century.

“Green Buildings Are Going Mainstream”, Harvard Business Review – June 21, 2006


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Cost to build Green

No longer a barrier

Research indicates that Green Building valuation is marginally higher than that of traditional buildings

1% to 8% - depending on green features

Marshal Swift Boeckh report to Fireman’s Fund


History of GreenFireman’s Fund Culture …Differentiation supported by deep knowledge of what is

important to our customers. Two ways an insurance company can compete – price or differentiation.

Green Research began three years agoContacts in the Green MovementReadingConventions

BOMA and GreenBuild

Coverage developed 2006

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History of GreenSynchronicity …

Ceres Report and media interest

Allianz/WWF Report

Growing Public Awareness of Climate Change

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http://images.google.com/imgres?imgurl=http://www.ceres.org/img/ceres_logo_web_nmatte.gif&imgrefurl=http://www.ceres.org/news/pf.php?nid=221&h=44&w=144&sz=5&hl=en&start=2&tbnid=VBsFSOpo-YpBsM:&tbnh=29&tbnw=94&prev=/images?q=ceres+climate+insurance&svnum=10&hl=en&rls=GGLR,GGLR:2006-14,GGLR:en&sa=G


History of Green

Coverage Launched in October2006 GreenBuild

Media

Early Successes

Loss Control Champion

Personal Lines Product

Corporate Ethics

Greening our own Facilities

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Green-GardGreen-Gard

CoveragesCoverages

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Certified Green Building Coverage Coverage is designed specifically for the unique propertyexposures of green buildings A 5% credit has been filed torecognize the superior features of green buildings.

Coverage Features:• Vegetative Roof – Many (but not all) certified green buildings have vegetative roofs. Property policies have restrictions on plants which

are not compatible with these roofs.• Power and Water Coverage – We fully cover alternative power and

water systems including Loss of Income• Professional Expense – We will pay to hire an LEED Accredited Professional to oversee post loss repair or reconstruction.

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Certified Green Building CoverageCoverage Features (con’t):

• Debris Removal - Debris removal coverage is extended to cover the additional expense of recycling.

• Professional Expense – We will pay to hire an LEED Accredited Professional to oversee post loss repair or reconstruction.• LEED Current Requirement Coverage - If Ordinance and Law

coverage is provided and is triggered, we will rebuild to the most current green standards.

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Green Real and Personal Property Upgrade Coverage Coverage designed for traditional buildings to be upgraded with green features following a loss.

“Like kind and quality” replacement cost provisions are replaced with more liberal language allowing replacement with building components, personal property and interior finish products that are aligned with green certified property.

The components subject to upgrade include:• Business personal property such as Office furniture and other

fixtures and furnishings and other furnishings if green equivalent products are acceptable under LEED or Green Globes.

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Green Real and Personal Property Upgrade Coverage

The components subject to upgrade include:

• Repairs will be made with green interior finish materials and components, such as paint, sealants, adhesives and carpeting. (Low VOC)

• Replacement of CFCs and HCFCs in equipment, appliances and extinguishing systems with materials that meet the LEED or Green Globes Standards.

• Electronic equipment to be replaced with Energy Star rated equipment. This equipment includes office equipment, commercial cooking equipment, laundry equipment and consumer electronics.

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The components subject to upgrade include:• Interior lighting systems using standards as defined by the LEED or

Green Globes for lighting systems that are considered Real Property or Business Personal Property or tenants improvements and betterment.

• Interior plumbing systems including water efficient upgrades such as waterless urinals, sensor activated urinals and faucets, dual flush toilets, flow restrictors and localized hot water heaters.

• Roof materials. We will replace with Energy Star qualified roof and insulation material that meet LEED or Green Globes Standards. This will not include coverage for vegetative roofs.

• Small, light commercial HVAC systems as defined by EPA Energy Star.

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Additional Coverages:In the event of a total loss we will pay to rebuild the building as a “certified” Green Building, including all applicable green filing fees charged by USGBC.

The Debris removal coverage is amended to pay to divert recyclable materials to recycling centers rather then sending them to landfills.

Specific coverage for alternative energy and plumbing systems is also included if the risk already has these systems.

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Building Commissioning Expense For Green and Traditional Buildings

Commissioning is a post construction verification processperformed by a professional engineer that confirms thatbuilding systems have been installed or repaired tomanufactures/architects/owners specifications.

Commissioning will turn a building greener, lowering utilitycosts.

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Building Commissioning Expense

Commissioning is a key component of green certification andthe primary factor supporting the credit for certified buildingsoffered with Certified Green Building Coverage

Commissioning addresses the systems that contribute mostoften to property losses, electrical, HVAC and plumbing. TheCommissioning process includes life safety systems(sprinkler systems, alarm systems).

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Our coverage responds when a loss involving a defined building system exceeds $10,000.

Defined Building Systems:• Life Safety Systems - meaning fire and smoke dampers, smoke

detectors, fire suppression systems and fire alarm systems.• Health Safety Systems - meaning fume hoods, bio-safety cabinets,

associated exhaust fans and vents, isolators, emergency showers and eye wash stations.

• HVAC - Heating, ventilation and air conditioning systems and controls.

• Plumbing systems. • Electrical Systems and Controls.

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We will pay for the insured to hire a professional engineer to commissionthe repaired or replaced system.

A sublimit applies ($25,000 to $100,000 or more).

As an additional benefit we will pay for the professional engineer toperform a “test and balance” procedure on the HVAC system, even if theHVAC system was not involved in the loss. A $25,000 limit applies to

testand balance. Does not include the cost to repair the system.

Typical test and balance can reduce HVAC energy use by upwards of20%.

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Green Coverages – Next StepsGreen Coverages – Next Steps

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Risk Management Programs

Vendor Relationships

Green Advisory Group

Go Deep

Reinforce thought leader position

Leverage position - Our bottom line + Our customer’s bottom line + employees (ours and our customer’s) well being + positive environmental impact

Green Coverages Green Coverages

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Stephen BushnellProduct DirectorCommercial BusinessFireman’s Fund Insurance CompanyNovato, CA

415.899.4308

[email protected]

Thank you!

fireman's fund green-gard commercial insurance program

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