Climate and Insurance.org | takefive with Michael Lebovitz

Michael Lebovitz is senior vice president and division manager of Affiliated FM, a business unit of FM Global located in Johnston, Rhode Island.

Mr. Lebovitz oversees the day-to-day operations of the company, including production, underwriting, engineering and support functions. He also has served as Affiliated FM’s operations vice president, an area manager for the company’s Southern operations, and three years as district manager for the company’s Atlanta operation. Prior to joining Affiliated FM, Mr. Lebovitz held a number of positions at FM Global in underwriting and sales. He joined FM Global in 1985 as a loss prevention consultant.

Mr. Lebovitz holds a bachelor’s degree in chemical engineering from the Georgia Institute of Technology.

Takefive:
Affiliated FM recently introduced a new ‘green’ coverage endorsement to its proVision all-risk property policy. Can you describe some of the reasons behind your decision to offer this ‘green’ endorsement?

Michael Lebovitz:
As a commercial property insurer, our goal at Affiliated FM is to provide innovative products and services to meet and fulfill the needs of our clients. Many of our policyholders are looking to “go green,” and enact more environmentally friendly and sustainable business practices. We understand that sustainable and green building practices create new or emerging property risk exposures, such as green roofs, that require a different underwriting and property loss prevention engineering approach. Therefore, we developed this green endorsement as an alternative way to protect against property loss, while continuing to provide our clients with insurance coverage that ensures their properties are well protected.

Additionally, we observed the other green coverage policies in the marketplace and found many did not provide the policyholder with enough coverage or flexibility to allocate endorsement funds. For example, some limited policyholders’ input, required certification from a specific agency/organization, or restricted the level of certification policyholders could achieve under the policy. We uncovered an opportunity to develop coverage and provide associated property loss prevention engineering services that was competitively priced and easy for our policyholders to sustain.

Takefive:
Your green endorsement appears to offer a number of unique features. Can you briefly describe the endorsement’s major features?

Michael Lebovitz:
The first unique feature is a single, flexible limit for green coverage. There are no other sub-limits for this endorsement. In the event of a property loss, a policyholder who purchases our coverage can allocate their green endorsement funds any way they sees fit; whether it’s recycling building materials, hiring a green consultant for assistance in planning and certification, or installing a green roofing system.

Additionally, if a policyholder was previously certified and would like to maintain that certification, our coverage will provide the funds. Working with their broker and Affiliated FM, policyholders can purchase the amount of coverage they prefer and use the funds in ways that best support their business objectives and future goals to enact sustainable practices and create a greener building.

Many certifying bodies and rating agencies (i.e. The U.S. Green Building Council) have different standards and tiered levels of certification. The Affiliated FM green coverage endorsement does not restrict a policyholder from the green standards or rating agency they used to become “green certified.” Policyholders who are already certified green can use our endorsement to recertify and achieve the same level of certification they previously maintained. Or, if they choose, the policyholder can use our endorsement to increase their certification level.

The overall goal of our endorsement is to develop comprehensive, cost-effective coverage that places the power in the policyholder’s hands, and makes the process as easy as possible for the policyholder to recover using green practices, should they choose to do so, in the event of a property loss.

Takefive:
Your endorsement allows an insured to hire an accredited green consultant. Can you explain how this provision works?

Michael Lebovitz:
Green consultants are available to assist a company in planning, implementing and maintaining green practices. They can also help companies determine where to start, how best to spend their money and, at the same time, reduce their overall environmental footprint. With Affiliated FM’s endorsement, policyholders can use funds to hire a consultant or expert in green buildings and practices to ensure the best environmental good in the most cost-effective manner.

Additionally, our property loss prevention engineers always work with selected green consultants, brokers and clients to review plans – ensuring property loss prevention measures and adequate protection are built into the project from the beginning. Property loss can have a negative impact on a client’s business, as well as a detrimental impact on the environment. Therefore, our goal is to protect the policyholder’s facilities and incorporate the appropriate green friendly materials before damage occurs.

Takefive:
Your endorsement also provides additional business interruption coverage. Can you explain how you see policyholders using this provision?

Michael Lebovitz:
Much of the work required to enact sustainable building practices and construct greener buildings demands more time than normal rebuilding or construction projects. The recycling of building debris and materials, the process to obtain green building certification, and the limited availability of environmentally friendly materials and equipment can add time to the completion of a project. Therefore, Affiliated FM’s business interruption coverage takes into account this additional time.

Additionally, our endorsement allows a policyholder to plan its project from the beginning to ensure that the desired green practices are aligned with their company objectives and do not impact business operations. Affiliated FM’s coverage also enables policyholders to adhere to their plans without feeling rushed to complete a project for fear their business interruption budget will run out.

Takefive:
Finally, what has been the initial reaction of the insured to your green endorsement, and does Affiliated FM envision offering other ‘green’ options in the future?

Michael Lebovitz:
Many of our policyholders have implemented green practices for their properties and facilities. Others are beginning to explore the options in which they can enact sustainable building practices. We have received many calls from brokers and policyholders asking how our endorsement will help them achieve their goals in the event of a property loss. As with any new coverage, usage tends to be limited at first and grows over time. We have sent this message to brokers and policyholders; interest has been quite high.

At Affiliated FM, we work closely with policyholders to implement property loss prevention programs that reduce their overall cost of risk. Green technologies, such as roofing systems, indoor and outdoor equipment and new building materials, are creating new exposures that, if not properly addressed, could put our policyholders at risk. As the industry progresses and our understanding of green buildings and methods for property protection evolves, we will continue to evaluate insurance coverage needs in response to the needs of our policyholders.