Lexington Insurance Co. has introduced CarbonCover ODS, a property insurance policy that addresses the emerging needs of the climate change and greenhouse gas emissions sector. CarbonCover ODS is designed for project developers who are collecting tangible physical assets for the purpose of creating emission reductions and carbon offset credits.
CarbonCover ODS responds to direct physical loss or damage of a physical asset that is being collected to create carbon offset credits. These assets can include ozone depleting substances (ODS) that are removed from refrigeration systems or methane gas that is extracted from landfills or underground mines. Direct physical loss or damage to the asset is measured as the value of the carbon offset credits that would have been issued for the destroyed asset absent the loss, in accordance with a carbon registry’s project protocol.
“The loss valuation structure of CarbonCover ODS allows project developers to protect against lost income they could suffer when they are using property with relatively low replacement cost value to create a higher-value carbon offset credit — and that property is lost or damaged during the process,” said Erik Nikodem, executive vice president and Property Division executive of Lexington Insurance Co.
“Traditional property policies don’t respond to the true value of the insured’s loss.”
CarbonCover ODS is the third product in Lexington’s CarbonCover suite of insurance products for businesses in the developing climate change and greenhouse gas emissions sector. The suite also includes CarbonCover Registry, which provides professional liability insurance for registries that track, confirm, and verify carbon offset credits; and CarbonCover Design & Confirm, which extends Lexington’s architects and engineers professional liability coverage to expressly cover claims arising from greenhouse gas consulting services or emission reduction verification services.