The City of Toronto just passed North America’s first ordinance mandating the installation of a green roof on new construction commercial and industrial buildings greater than a certain square footage. Green roofs are sprouting in numerous other jurisdictions in response to the sustained interest in sustainability and green building construction. A key question that must be answered is how they will be insured. The answer may not be identical to the coverage response for a traditional roof.
Many building owners, developers and investors are increasingly focused on participating in the green building trend (whether for principled or monetary reasons). This article looks at green roofs from an insurance perspective. First, the article describes the nature of a green roof and catalogs potential problems that may occur with roofs generally and green roofs in particular. Next, the article considers the role of insurance in the context of traditional roof problems and extrapolates from those ideas to discussion of how a claim concerning a green roof problem (including the effect of LEED standards) might be addressed.
Once one understands the construction of a green roof, it becomes obvious that the problems that will arise with a green roof go beyond those common to traditional roofs. At the very least, the extra tons of dirt and water intrinsic to the roof will act to make roof problems more severe and more difficult to locate.
Insuring such problems will likely follow the template for insuring traditional roofs; for example, owners should be able to take advantage of the doctrine of concurrent causation to find coverage where an excluded cause and a covered cause join to cause a loss. But there also will be twists. Losses formerly considered aesthetic and not property damage (and therefore uncovered) may be found under a different analysis to constitute property damage (and be covered). Questions will also arise as to whether compliance with ordinances like Toronto’s and other municipalities’ will be excluded by “law and ordinance” exclusions or covered as “necessary costs of repair.” Likewise, owners of green roofs with a business interruption claim may be faced with the question of whether the period of restoration will be adjusted to acknowledge the importance of the growing seasons, the availability of cutting edge new materials, or the time involved in the LEED certification process. These questions can only be answered by a thorough understanding of green roofs and thoughtful investigation into the particular risks of concern to the owner.
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