Senate Passes Brownfields Environmental Act

April 27, 2001

The Senate unanimously passed the Brownfields Revitalization and Environmental Restoration Act of 2001 by a vote of 99 to 0. The American Insurance Association (AIA) called the bill (S 350) good for cities, people, business and environment since it promotes the cleanup of contaminated abandoned industrial sites located primarily in urban areas.

According to John Arlington, AIA assistant vice president for federal affairs, contaminated sites have been an “economic and environmental blight on communities for far too long.” “Passage of this bill is a huge step forward in restoring the life and prosperity that should be thriving in and around these areas,” he stated.

The bill will authorize $250 million in grants for site assessment and cleanup to return these sites to useful purposes. No companion or similar bill has yet been introduced in the House, but Arlington is expecting that, due to Brownfields popularity, the House will soon consider a bill. Arlington acknowledged the controversial aspect of the issue due to the question of state versus federal authority, specifically the ability of the federal Environmental Protection Agency to second-guess state cleanup decisions. According to Arlington, the solution is a market solution–insurance.

Property and casualty insurers have stepped into the gap to cover the problem of “re-opened” sites, and insurance products currently are available to cover the costs of additional cleanup of specified contaminants after the initial cleanups have been completed and approved by state or federal regulators. In some cases, insurance policies also may be written to respond to additional cleanup that may be required due to future changes in the environmental laws.

Insurance products also are being written to cover cost overruns for specific remedial action plans; the discovery and remediation of new contaminants; and third-party bodily injury, property damage, and cleanup claims arising from newly discovered contaminants.

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