Feb 22, 2016

Flint Water Crisis & Business Insurance: Protecting Your Business from the Dangers of Lead Exposure

The recent water crisis in Flint, MI, which exposed thousands of people to toxic levels of lead in the drinking water, has prompted many business owners in the hospitality, real estate and restaurant space to evaluate their own risks and liabilities in the event that a customer were to become unintentionally sick from drinking contaminated water.

The problem is most companies’ Commercial General Liability (CGL) policies do not cover the risks associated with contaminated water.That is because their CGL policies likely contain the standard “Absolute” Pollution Exclusion, the more restrictive “Total Pollution Exclusion”, a specific lead Exclusion, and exclusions applicable to legionella and mold. And those policies will not cover claims and lawsuits alleging that someone became ill or suffered permanent injuries or damage due to contaminated drinking water. This can leave a company susceptible to lawsuits and other financial damages that can hurt the bottom line.

Protecting Your Business from Risks

It’s important that establishments, such as hotels and restaurants that service patrons on a daily basis implement protocols to monitor for any potential environmental hazards in the air or water that could negatively impact their customers’ health. For example, high levels of lead found in drinking water can lead to neurological disorders in children and other severe health issues in adults. To protect customers from these types of health hazards, businesses should consider the following steps to keep their environment safe:

Water and Air Quality Testing Services

Hire an outside environmental agency associated with a certified laboratory that can test the water for contaminants, such as lead on an annual basis. These agencies can also test for Legionella, a type of bacterium found in water and cooling systems that can result in Legionnaires’ disease, a severe form of pneumonia.

Identify and Remove Lead Piping, Fixtures and Connections

Lead piping was commonly used in plumbing systems up through the early 1900s. If your building was constructed prior to 1930, there is a decent chance that its plumbing contains lead piping. Moreover, utilities and municipalities regularly used lead pipes for service connections. Lead pipes, however, are not the only potential source of lead contamination in drinking water. Copper fixtures contain lead used in their casting. Those fixtures can be corroded over time and result in lead leaching into the water flowing through the fixtures. Lead solder connecting copper or brass pipes is another potential source of lead contamination.

Filtration and regular flushing of pipes may provide temporary fixes to high concentrations of lead, but they are neither efficient, nor effective solutions. Rather, businesses with lead in their water should completely remove and replace the source of lead in their water.

Consider Pollution Legal Liability Insurance

Insurance products exist to cover risks, such as claims arising from lead contamination, excluded from a company’s CGL policy. The best way to protect a company from lawsuits stemming from environmental pollutants in its drinking water is through a Pollution Legal Liability (PLL) insurance policy geared specifically for the hospitality, restaurant or real estate industries. These policies will typically cover for bodily injury and property damage, as well as the costs to remediate and cleanup any contamination. In addition to lead, PLL policies can protect companies against liability and property damage associated with legionella (Legionnaire’s Disease), biological waste, mold, bedbugs and even methamphetamine laboratories.

Hotels, real estate owners, and restaurants have significant exposure to risks associated with contaminants found in drinking water that can cause someone to become sick. It’s crucial that these businesses first enforce safety measures to ensure the water is safe and clean, and to consider a Pollution Legal Liability policy to protect their assets.



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