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.
The essential characteristics of the environmental indemnity have not changed in that time, and it still contains four essential promises: (1) that the property either has no environmental issues or that any such issues have been disclosed; (2) that the indemnitee will ensure that no such issues commence in the future; (3) if they do, that the indemnitor will defend and indemnify the indemnitee for any costs related to those issues; and (4) that the indemnitee will be allowed some right to investigate environmental issues on the property. 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.
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