| Abstract: | A significant hindrance to reuse of brownfields properties is the risk associated with redevelopment,specifically the uncertainty associated with environmental cleanup. This article explores an approach tomanaging environmental risk through a combination of risk quantification, environmental insurance, and theTriad Approach to site sampling and data interpretation. The expected costs of environmental liabilities areestimated using the Marsh Peer ReviewSM risk quantification process that employs statistical techniques andhighly experienced technical staff. The outputs of the process indicate premiums and attachment points forinsurance products, but they also point to “critical uncertainties” that drive the insurancepremiums. Insurance premiums are often linked to site delineation deficiencies, such as the magnitude ofimpacted soil or the size of a groundwater plume. The Triad Approach is an integrated site characterizationprocess developed by the Environmental Protection Agency that combines systematic planning, dynamic or adaptivefield decision making and field analytical methods (FAMs). The real‐time data produced by FAMsallow for in‐field resolution of uncertainty about sample location, which in turn provides morerepresentative delineation of contaminant distribution. The trade‐off of using slightly less accuratebut substantially lower cost FAMs is an increase in sampling frequency or density, thereby reducing the risk ofincomplete detection or delineation while yielding a “data set” that is more powerful than fewerindividual data points analyzed through traditional methods. Employing the Triad Approach to analyze the“critical uncertainties” identified in the Peer Review Process can impact insurance premiums andallow for better terms of coverage. The combination of using the Triad Approach and environmental insuranceproducts can lead to more predictable and profitable Brownfield transactions. © 2003 Wiley Peridicals,Inc. |
