For at least the past 30 years, parties involved in the purchase or sale of properties that contain environmental exposure have had to negotiate environmental indemnity agreements, either to protect assets, transfer liability, or to simply get a deal across the finish line. However, as more properties have become insured through comprehensive environmental insurance programs, thus fundamentally changing the nature of, and obligations associated with, the environmental risks associated with that property, indemnity agreements often have not kept pace. As environmental risk management has become more sophisticated and more central to transactions involving environmentally-contaminated real estate, so should negotiations apportioning environmental risks among various stakeholders. This includes a more nuanced approach which recognizes that parties other than the signatories to an indemnification agreement can incur such risks.
Read more in my Legal Intelligencer/Pennsylvania Law Weekly column here.