What is asbestos?
Asbestos is a group of six naturally occurring fibrous minerals composed of thin, needle-like fibers. It was used by builders at the end of the 19th century because of its affordability and resistant to heat, electricity, and corrosion. It was used as insulation around pipes, electrical wiring, and in many building components such as floor and ceiling tiles and insulation, caulking, drywall, and drywall joint compound.
Why is asbestos dangerous?
Over decades, trapped asbestos fibers can cause inflammation, scarring and eventually genetic damage to the body’s cells. A rare and aggressive cancer called mesothelioma can be caused by asbestos exposure. It also causes other forms of cancer as well as progressive lung disease.*
After numerous health concerns were raised and studies had been conducted, the U. S. Environmental Protection Agency (EPA) issued a ban and “phase out rule.” The phase out rule was eventually overturned as a result of issues raised by the asbestos industry and many consumer products still contain trace elements of asbestos such as concrete water tanks, panels that surround bathtubs, wood burning stoves, and some insulation materials.
Insurance solutions to the environmental exposures that may stem from asbestos abatement operations
There are two main types of insurance products that apply to work conducted by asbestos abatement contractors:
Contractors Pollution Liability (CPL) polices are designed to respond to claims against contractors for pollution events related to their abatement operations. They will respond to claims asserted against asbestos abatement contractors for third party Bodily Injury, Property Damage, and Clean up Costs. They may be endorsed to provide coverage for pollution events during transportation of asbestos waste or materials used during abatement activities as well as pollution events at disposal sites that may come back to the generators of materials sent to disposal sites. There have been cases where abatement contractors have been held responsible under environmental laws for environmental claims against disposal sites because of their involvement in the disposal of hazardous asbestos containing materials.
Pollution Liability (EIL) policies are designed to respond to claims against asbestos abatement contractors for pollution events related to their owned facilities where they may store equipment or hazardous materials, including asbestos waste. This type of policy will respond to claims asserted against contractors for third party Bodily Injury, Property Damage, and Clean up Costs. They may be endorsed to provide coverage for pollution events during transportation of hazardous asbestos containing materials as well as pollution events at disposal sites that may come back to the generators of materials sent to disposal sites. In addition, First Party Business Interruption is typically an available enhancement to this type of policy.
Sample Environmental Insurance Claims Against Asbestos Abatement Contractors
Two employees of a gas/electric company and their asbestos removal contractors were charged with violating safety standards while removing asbestos from pipes in California. The workers were convicted and faced a five-year prison sentence and a $250,000 fine. The gas/electric company faced a total of $2.5 million in fines.
The owner of an asbestos abatement company was charged with violating the Clean Air Act after he hired an individual to transport asbestos containing material (ACM) to a disposal facility. The individual took the material and abandoned it in a semi-trailer in a parking lot. A company redeveloping the parking lot discovered the trailer and its contents. The owner of the asbestos abatement company had to pay $180,000 to dispose of the ACM property and faced fines of $250,000 and two years of imprisonment.
In 2008, the Environmental Protection Agency (EPA) conducted a compliance inspection of a renovation jobsite. The results of the investigation found various violations of the National Emissions Standards for Hazard Air Pollutants (NESHAPs) that related to the handling of asbestos containing material (ACM). Some of those violations included the fact that the contractor did not prevent visible emissions to the outside air and no markings on the disposal vehicle during loading of asbestos for removal from the jobsite. The contractor settled with the EPA for $36,000.
To learn more about insurance for asbestos abatement contractors, contact us.