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Legal insurer Legal & Contingency has launched the UK's first contaminated land insurance as a result of a growing demand from lawyers whose clients are worried about buying or selling such land.
The company is offering policies for developers, investors, building societies and home buyers.
Managing director Brian Raincock said the launch had been spurred by the implementation of the Environment Act 1995 which makes owners or occupiers of contaminated land responsible for cleaning it. It also forces local authorities to designate contaminated land, so that potential purchasers will know what they are buying.
The Government's target of building 4.4 million homes was also leading to a surge in the demand from lawyers for protection for their clients, he said.
Bob Gordon, operations director of rival legal insurer Greystoke Legal Services, said his company had noticed a demand and was looking seriously at a similar move.
Legal & Contingency's policies will cover a landowner only once they have cleaned up contaminated land. It will protect them from the land becoming recontaminated through factors such as seepage.