Coverage

What is covered?

Terrafirma covers legal costs necessary for conservation defense. These costs include fees for attorneys and experts for lawsuits and mediation, for both the enforcement and defense of conservation easements and fee owned land. This would cover land trust attorney and other fees in the event the land trust either starts the lawsuit or is named in a lawsuit. It also covers attorney and other expert fees for efforts to resolve cases prior to litigation. 

Does Terrafirma pay for property damage?

No. Terrafirma is not property insurance. It is conservation defense liability insurance. Payment for damages including liquidated damages is excluded. 

Does the Terrafirma policy have specific exclusions?

Yes. The policy has 37 exclusions from coverage that land trusts should carefully examine.

Can Terrafirma extend the program to cover areas that are currently excluded?

If enough land trusts participate in Terrafirma, then we can examine the feasibility of expanding the program to cover some or all of these additional risks. Initially, none of these risks will be covered.

My land trust is merging. Can we assign coverage to the new land trust?

Yes! However, if there is a merger the surviving organization will need to be enrolled already in Terrafirma. If the surviving organization is a new organization, it must show eligibility for Terrafirma, and one or more of the merging organizations must be enrolled already in Terrafirma. The surviving organization will be required to insure its full portfolio of easements of fee land, not just the portfolio of one of the merging organizations. 

Is coverage assignable if my land trust assigns a conservation easement during the policy period?

Possibly. An assignment of a single easement may pose administrative issues but Terrafirma can address it on a case by case basis. Contact us for further assistance if your organization has plans to do this by clicking the "Contact Us" link on the right side of this webpage.

Do divisions of fee land or conservation easements affect my coverage?

Yes. If you permit a property division on your land, the land that is divided and transferred to a new owner will not be covered until the division is reported to Terrafirma and an additional premium paid. This is consistent with the Terrafirma counting rules.

How does co-holder coverage work?

Terrafirma offers coverage for co-holders of conservation easements or co-owners of fee-owned land on the following conditions:

1. Only one aggregate collective policy limit and claim limit.
2. Each co-holder seeking coverage would pay a full premium. (The reason for not reducing the premium for co-holders is that multiple holders would increase complexity of case management.)
3. Required to consent to joint representation by one attorney.
4. The primary holder would be the “first named insured” and would manage the Terrafirma relationship. The co-holders need to designate a primary holder for insurance purposes and execute a written agreement about co-holding roles and responsibilities.
5. The primary holder would be delegated to act for all the other insured co-holders on any claims.
6. Suits between co-holders are excluded (this is called an “insured versus insured” exclusion).
7. Each insured co-holder must be separately eligible to participate in Terrafirma.
8. The co-holders must enter into a binding legal agreement regarding roles, responsibilities, and rights to manage the claim and claim attorney that Terrafirma reviews prior to coverage.

If the primary holder has coverage, then the other co-holders may choose not to insure only their co-held easements with that primary holder. The uninsured holders would be solely responsible for their legal costs. If the primary holder is not insured, then the co-holders may not exclude the easement from their insured portfolio.

If your land trust shares its monitoring responsibilities with, or delegates them to, another entity (such as a public agency, a co-holder, or other partner) you must conduct your own annual monitoring or have documentation of the annual monitoring conducted by the other entity.  

What if our land trust holds a conservation easement and later on acquires the underlying fee simple interest (or vice versa)?

Many states do not have an explicit statute prohibiting automatic merger of a conservation easement ("CE") when the exact same entity acquires the remaining legal interests in fee simple ownership. Therefore, unless the CE has an explicit clause prohibiting merger, please only insure the fee simple interest with Terrafirma. If any CE has an explicit and unambiguous no merger clause then feel free to insure that as well as the fee simple but not otherwise. This is consistent with the view of the Accreditation Commission and with Standards and Practices that that state law controls merger of title. However, it is important that you consult with a licensed attorney familar with real property law in your state to understand how (and if) your state handles mergers, and the determination will depend upon, in part, the deeding instrument's terms and conditions. Please reach out to ARMS if you have questions about how to insure your interest. 

Interested in learning about commonly purchased insurance compared to Terrafirma? Check out this helpful document.