• Environmental Liability Buyout is when a third party contractually assumes ownership of the known environmental conditions in a given property. In exchange for a cash payment to a third party, the third party will assume all corrective action obligations and liability associated with known terms. The host will then take all necessary corrective action, negotiate with the Environmental Protection Agency (EPA) or other regulators, and provide full compensation to the “seller”. From a procedural point of view, the contractual assumption usually requires the receiving party to purchase an environmental insurance policy to support its indemnification. Thus, the assigning company will be protected in case of refusal of the guarantor. To protect funds transferred to a third party, the terms of the insurance contract usually require the use of a limited risk insurance policy.