Lexington Insurance Co. has introduced a first-party coverage for conservation and mitigation banks, organizations designed to provide natural resources values.
The product, called LexEcoBank, is a standalone coverage that protects against named perils for owners and operators of these organizations. It covers restoration expenses and bank credit losses incurred by policyholders in case of a covered loss to a habitat before the bank-enabling instrument is executed and credits can be sold.
If a covered loss happens after the instrument has been executed, the policy pays for the restoration expenses needed to meet the ecosystem performance criteria. Policies are available for up to 5 years.
“Habitat credits – the financial instruments that represent the ecological value associated with an acre of ecosystem – are the currency of conservation and mitigation banking,” said Erik Nikodem, senior vice president and property division executive of Lexington. “Investment returns suffer if habitat credit sales are delayed as a result of direct physical loss or damage to the habitat that reduces its ecological value. LexEcoBank was developed to protect both the property and the habitat credits.”
LexEcoBank joins UpGrade to Green and CarbonCover in Lexington’s EcoSurance line of products that support environmental sustainability. Lexington is a member of the New York-based Chartis.