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Insurance against losses due to permit appeals

One of the obstacles to rapid development in Belgium has long been the time it takes to clear all of the permit procedures, and in particular to deal with appeals from local inhabitants and interest groups.

To help in this domain, young insurance broker SAR Belgium has therefore launched an insurance contract (via major European insurers with an excellent rating) against the appeal on environmental permits. This contract is a first in Belgium and, when a valid environmental permit has already been obtained, protects developers, landowners and buyers (on plan). It covers the financial consequences of an appeal to the Council for Permit Disputes where the permit has been cancelled or suspended for more than 18 months.

In concrete terms, landowner policy holders can be reimbursed for the price of the land value increased by 10 to 20%. Property developers are covered for claims from materials suppliers and the price of the unsold equipment, while buyers of apartments or houses (sale on plan) can receive an amount equal to the price of the insured property or the fraction already paid, increased by 10 to 20% for hidden costs including cancellation of the loan, prolonged house rental.

SAR points out that this insurance applies not only to residential projects but to all projects with an environmental permit. This includes retail projects and wind farms that are often opposed by a ‘Not In My Back Yard’ mentality (NIMBY). For developers of wind turbine zones there is even the special ‘Renewable Energy Insurance’. If the project cannot be realised and/or exploited in whole or in part, the insurer pays out a compensation equal to the estimated production for a maximum of 6 years of the project that the insured person misses.

Jérôme Eliat of SAR Belgium (photo) points out: “It is important that our insurance contract appeals to and supports specific project developers who would otherwise see good, socially well-founded (construction) projects frustrated by bullying from people without an objective interest.”

He goes on to say, as a demonstration of the necessity for this type of insurance policy: “Building projects or wind turbine installations cannot be realised without an environmental permit, and the application for such a permit is a long and complex technical process in Belgium. Moreover, third parties can still appeal after a valid environmental permit has been granted. In appeal procedures, notaries generally refuse to execute the deed of sale. This often leads to months of blockage of construction starts and sales transactions in which all parties involved suffer considerable financial damage or even go bankrupt.”
Tim Harrup
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