ARTICLE · 20 MARCH 2025

The Climate Premium: How Environmental Risks Are Reshaping CRE Economics

Goodwin Procter LLP

Explore more from Goodwin Procter LLP

Columbia's Pari Sastry shows how the growing disconnect between climate risk and available insurance is transforming commercial real estate.

United StatesInsurance

Goodwin Procter LLP

The US property and casualty (P&C) insurance market is undergoing a seismic shift, driven by escalating climate risks and rising claims. But in many high-risk states, regulatory constraints prevent insurers from fully adjusting premiums to match the growing exposure. As a result, rather than simply charging higher rates, many insurers are pulling back — scaling down coverage, tightening underwriting standards, or exiting certain markets altogether.

This shifting landscape is increasingly affecting the commercial real estate (CRE) sector. Developers, lenders, and investors are facing a new reality in which insurance coverage is more expensive, harder to secure, or even unavailable in some high-risk areas.

We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.

Register for freeORLog in

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Related Articles

California Court Finds Attorney Letter Constitutes A “Claim” Despite Lack Of Express Monetary Demand

United StatesInsurance

Construction Contracts: Why A Certificate Of Insurance Is Not Enough

United StatesInsurance

Third Circuit Holds Ownership Percentage Exclusion Does Not Render Security Holder Derivative Coverage Illusory

United StatesInsurance

Colorado Supreme Court Holds Primary Insurer’s Insolvency Does Not Trigger Umbrella/Excess Coverage

United StatesInsurance

Trump Executive Order Addresses Mortgage Insurance, Title Insurance Costs

United StatesInsurance

Greenberg Traurig

Legal Intelligence Newsletters: sign up for the latest legal and regulatory news on your chosen topics

Read more about

Related Comparative Guides

Comparative Guide

Insurance & Reinsurance

See more popular content from

Insurance

New York Ends The Year With Onerous New Insurance Coverage Disclosure Rules For Defendants In Product Liability Litigation

On December 31, 2021, New York Governor Kathy Hochul closed the year by signing into law the Comprehensive Insurance Disclosure Act (S7052) to impose sweeping changes to the rules embodied...

United StatesInsurance

Wilson Elser Moskowitz Edelman & Dicker LLP

AI Regulation In Insurance: A Crossroads

As artificial intelligence development accelerates and safety concerns mount, state insurance regulators are advancing comprehensive examination frameworks to govern AI use in the insurance industry. The National Association of Insurance Commissioners nears completion of its AI Risk Evaluation Supplement, which will establish standardized oversight procedures for insurers' AI governance practices across market conduct and financial examinations.

United StatesInsurance

McDermott Will & Schulte

Privacy, Cyber & Data Strategy Advisory | NAIC Summer Meeting Sharpens Focus On AI, Data, And Technology Governance

The National Association of Insurance Commissioners intensified its regulatory focus on artificial intelligence governance, third-party data models, and cybersecurity oversight at its Summer 2026 meeting. Regulators are shifting from principles-based guidance to examination-ready supervisory tools, emphasizing that insurers remain accountable for the technologies and vendors they deploy. The meeting revealed how AI risk evaluation, vendor oversight frameworks, and privacy modernization efforts are convergin

United StatesInsurance

Alston & Bird LLP

Agents Of Change: Amendments To Washington State Insurance Regulations Take Effect October 18

Washington's Insurance Commissioner has announced significant amendments to insurance claims handling regulations that will reshape how insurers investigate and process claims in the state. The changes, effective October 2026, introduce new requirements for mitigation approvals, investigation standards, and claimant communications that could substantially impact insurer operations and liability exposure. These regulatory updates come in response to a surge in consumer complaints and litigation, establishing

United StatesInsurance

Ballard Spahr LLP

Don’t Try To Deny It: Federal Court Holds FCA Settlement Is Covered By Insurance

A federal court ruled that CNA must provide coverage for Guidehouse's $7.6 million False Claims Act settlement related to cybersecurity failures in New York's Emergency Rental Assistance Program portal. The decision addresses critical questions about when insurers can deny coverage for FCA settlements under professional liability policies, particularly regarding exclusions for fines, penalties, and deliberate acts.

United StatesInsurance

Crowell & Moring LLP

Cyber Insurance Decoded: What Your Policy Actually Covers, What It Excludes, And How To Maximize Your Protection

A data breach exposes thousands of customer records. An employee falls for a phishing email and wires $200,000 to a fraudulent account. A vendor’s compromised software infects your network.

United StatesInsurance

Ward and Smith, P.A

Massachusetts Appeals Court Affirms Chapter 93A Liability For Delayed Disability Insurance Benefits

The Massachusetts Appeals Court examined whether an insurer's two-year delay in paying disability benefits constituted a violation of state consumer protection and insurance laws. Despite medical evidence describing the plaintiff's feet as paralyzed and functionally useless, the insurer repeatedly denied claims under a policy provision for total loss of use of both feet, arguing the plaintiff could still walk with assistive devices.

United StatesInsurance

Greenberg Traurig

“Limited Partner” Health Plans Raise Concerns For State Regulators

Montana state insurance regulators recently raised a red flag about the increasing availability of self-insured limited partner health plans. As consumers seek relief from the skyrocketing costs of major medical insurance plans, limited partner health plans are rising in popularity, with Montana reporting that at least 12 companies now offer them in the state.

United StatesInsurance

Hall Benefits Law

The CLO Chronicles — NAIC’s New Life RBC Factors Cross The Finish Line (Podcast)

The NAIC has spent four years overhauling capital requirements for life insurance companies' investments in collateralized loan obligations, introducing dramatic changes that will reshape how insurers allocate capital across their investment portfolios. These new rules, which account for credit spectrum positioning and tranche thickness for the first time, will force insurers to model significant impacts before year-end 2026 implementation.

United StatesInsurance

Is Your PFAS Coverage At Risk? An Ohio Federal Court Ruling Opens The Door To Broader Insurer Denials

A federal court in Ohio has ruled that an occupational disease exclusion in a commercial general liability policy bars coverage for PFAS-related personal injury claims brought by firefighters against a manufacturer of firefighting equipment. This landmark decision could significantly impact how insurers respond to PFAS product liability claims and may extend beyond occupational disease exclusions to other policy provisions using similarly broad language.

United StatesInsurance

Benesch, Friedlander, Coplan & Aronoff LLP