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environmental Strategist, between the lines:  As the article below points out there has been an eight-fold increase in the number of Legionnaires cases over the last two decades.  The hotbeds for Legionnaires are hot tubs, hotels, hospitals.  The “experts” point to several factors for the explosion of cases in the US, i.e. decaying infrastructure, an aging population, green buildings, water conservation efforts, climate change and increased testing.

Legionnaires Disease is a bacteria that can create an environmental liability for those using central air conditioning systems, fountains, room-air humidifiers, ice-making machines,  whirlpool spas, water heating tanks & systems, showers, swimming pools, misting systems typically found in grocery-store produce sections, cooling towers used in industrial cooling systems, evaporative coolers, nebulizers, humidifiers, windshield washers, physical therapy equipment….

The article discusses that dealing with Legionnaires can be very expensive and it’s anticipated the number of Legionnaires cases will continue to grow.

Besides property owners experiencing expensive cleanups, business interruption, third party bodily injury, third party property damage, reputational damage…, who else gets named in Legionnaire lawsuits?  Vendors who can impact water such as plumbers, HVAC contractors, Refrigeration contractors….

As your client’s professional risk manager, you need to make sure clients have an environmental financial assurance plan to address their exposure to Legionnaires.

Pollution insurance can protect your insureds from Legionnaires liabilities.   

https://www.chicagotribune.com/lifestyles/health/sc-hlth-legionnaires-1113-20191108-fkgvdm2nnratfe2uuxavmsasqe-story.html

We have strategized how Legionnaires occurrences experienced a five fold increase from 2000 to 2017.  Sometimes it can be tricky for me to understand what this means.  I was reading the web links below that offer articles related to recent Legionnaires occurrences, pay attention to the dates.

Headlines:

10-21-19:  DC Psychiatric Hospital Goes Weeks Without Drinking Water

10-18-19: 4^th Legionnaires Disease Death Reported In North Carolina From Hot Tub Display

10-10-19:  Michigan Probes Detroit Area Hospitals 7 Legionnaires Cases

10-4-19:  NW Indiana Schools Closed After Legionnaires Discovery

9-15-19:  2 New Cases of Legionnaires in Suburban Chicago

8-18-19: Officials Probe Respiratory Illness At Quincy Veterans Home

8-15-19:  Source Confirmed In Legionnaires Outbreak At Atlanta Hotel

8-14-19:  Maine CDC:  Legionella Bacteria Eliminated From Water Source

8-1-19:  Hotel In Schaumburg, Illinois

8-1-19:  Hotel In Tomahawk Wisconsin

7-15-19:  Three Employees in La Porte County Indiana

7-1-19:  Nursing Home in Connecticut

Question:  How many Legionnaires cases were not reported or known about?

Who has exposure to Legionella?  Legionnaires Disease is a bacteria that can create an environmental liability for those using central air conditioning systems, fountains, room-air humidifiers, ice-making machines,  whirlpool spas, water heating tanks & systems, showers, swimming pools, misting systems typically found in grocery-store produce sections, cooling towers used in industrial cooling systems, evaporative coolers, nebulizers, humidifiers, windshield washers, physical therapy equipment….

Question:  Should you be strategizing on managing and transferring Legionnaires exposures with your insured’s?  Environmental Risk Managers is here to team up and assist.

Links to Legionnaires articles:

https://www.apnews.com/Legionnairesdisease

https://hcinfo.com/about/outbreaks/recent/

Fact:  Pollution liabilities are a severity, versus frequency issue, that can have a catastrophic impact on HNW insureds.

Fact:  Many of today’s HNW insureds have outgrown their personal & commercial insurance policies coverage capabilities.

Fact:  Pollution liabilities are a great example of how one’s affluence can out pace their insurance policies.

Today’s HNW insured’s need coverage that goes beyond their personal & commercial insurance policies.

Question:  Will the personal and commercial insurance policies you have in force cover your HNW insured’s cover for the following loss examples?

The ERMI HNW Pollution Program can cover for the following loss examples.

Environmental Loss Examples

1. A HNW insured purchased a piece of property to build a residence.  During excavation, oily smelling soil was encountered.  Investigation revealed the source of the contamination was an old unknown dump site on a former farm, now part of an affluent residential community.  The HNW insured paid $150,000 to clean up their property and their attorneys were investigating possible restitution options.
2. Environmental exposures created by motor craft (car, boat, Plane) restoration.  A car collector had a private garage where he restored and stored his car collection.  To fuel the vehicles there was a 1,000 gallon above ground storage tank.  While moving a vehicle the above ground tank was accidentally hit spilling it contents.  The fuel ran off the asphalt into the ground and a nearby creek.  Cost for remediation and natural resource damages was $250,000.
3. It was never determined how a yacht at a marina caught on fire. Because of the fire, neighboring boats also caught on fire.  Fire departments responded to the fires and after the fires were put out the resulting environmental damage cost the yacht owner more than $2,000,000 in fines, penalties, cleanup, business interruption….
4. A condominium was being renovated.  Tenants in the building complained about exposure to dust and other airborne toxins.  Tenants filed suit against the condominium owner and contractor for bodily injury from airborne contaminants entering the ventilation system.
5. Some residents in an upscale residential development were getting sick. After extensive investigation, it was discovered a chemical release from a nearby former dry-cleaning business were migrating via vapor intrusion into residences.
6. A condominium complex with an underground parking garage was in the path of a hurricane.  As a result of the heavy rains, the lower level of the parking garage was flooded.  The flooding caused backup of sewage as well as gasoline and other automotive fluids released from the vehicles in the garage.  Cleanup was required by property owners.
7. New construction was taking place on a previously undeveloped parcel of land. During excavation, contaminated soil was discovered.  The owner had to remediate the site before construction could continue.  It was later discovered the contamination had migrated onto the property from a former boat yard property that had been torn down and out of business for decades.  Remediation costs exceeded $500,000 for the property owner.
8. Several owners in a private residential community were experiencing health issues. During investigation it was discovered that some utilities in the houses such as electrical connections were corroding and could potentially cause a fire.  Testing revealed the dry wall contained contaminates not found in dry wall.  The manufacturer of the dry wall was a Chinese business.  Multiple lawsuits have been filed for multi-million dollar claims for bodily injury, property damage, diminution in property values and more.
9. After moving into their new home residents became ill. Testing revealed several flooring materials contained alarmingly high concentrations for formaldehyde.  Flooring had to be replaced but since the contractor did not have the proper pollution coverage the homeowner had to pay for the replacement and was suing their general and subcontractor for replacement costs along with bodily injury, property damages and extra expense for delays in construction.
10. Due to an unusually strong windstorm, waves broke through a retaining wall at several waterfront residences. Sediment blocked the canal and caused natural resource damages to a wetland.  Cost for restoration and cleanup exceeded $300,000.
11. A drilling contractor caused a release of raw sewage into both soil and ground water after failing to identify a sewer line before drilling. The clean up entailed the excavation of several tons of impacted soil and impacted other residential neighbors when their basements filled with sewage.
12. A real estate limited partnership acquired property previously used for farming on which they planned to build a mall. The firm hired an environmental consultant to conduct a Phase I Environmental Assessment. The property was determined to be “clean.” However, when excavation for the mall began, 100 drums of buried pesticides and herbicides were unearthed. The chemicals contaminated the soil and had to be removed at the firm’s expense. Remediation and drum disposal costs exceeded $750,000.

Fact:  If you have not developed an environmental financial assurance plan for your HNW insureds, your E&O coverage may be the only coverage your HNW insured has when they experience an environmental liability.

A recent study update conducted by the Environmental Working Group shows Michigan having the most “known” PFAS sites (192) and second place is not even close with 47 “known” contamination sites in California.  The key word is “known”.

Just as PFAS chemical use is everywhere, so too are PFAS contaminated sites.  As we have learned with Superfund sites, new PFAS contaminated sites are going to continue surfacing.  Early guesstimates are Michigan can have upwards of 11,000 PFAS contaminated sites.

For a little background on PFAS:  PFAS chemicals are used for their resistance to heat, water, oil and grease.  PFAS are a group of human-made chemicals that includes PFOA, PFOS, GenX, and many other chemicals. PFAS have been manufactured and used in a variety of industries around the globe, including in the United States since the 1940s and contaminate soil, ground water, surface water and the air.  PFAS can resist degradation in the environment and bio-accumulate; meaning that they are persistent in the environment and tend to concentrate in blood and organs over time in biological species.  People can be exposed to these chemicals in house dust, indoor and outdoor air, food, and drinking water. Exposure to certain PFAS chemicals has ties to cancer, ulcerative colitis in adults and thyroid disease in children, among other health problems.

Since PFAS contamination can create large plumes of contamination, this solicits 2 questions when analyzing a business’s environmental exposures.

1. “Who Are Your Neighbors”? When they do a Phase I Site Assessment, they do a minimum of a 2-mile radius search to find out who your neighbors are, and do they have known contamination that can be coming onto your property.  What we have learned from known PFAS contamination sites, is contamination can go way beyond a 2-mile radius.
2. What is your Environmental Financial Assurance Strategy (EFAS) to protect you from your neighbors PFAS contamination coming onto your property? Environmental liability insurance as part of an EFAS, can protect you from neighboring PFAS.

For more information on EFAS for PFAS contact:

Chris Bunbury:  chris@ermi.us    Brooks Bunbury:  brooks@ermi.us

https://www.clickondetroit.com/michigan-water/michigan-has-most-pfas-contaminated-sites-in-us-what-you-need-to-know

https://www.freep.com/in-depth/news/local/michigan/2019/04/25/pfas-contamination-michigan-crisis/3365301002/

This competitive environmental intelligence will offer a brief overview of State Storage Tank Funds vs. Storage Tank Insurance so you can make sure you are offering what is best for your insureds while better protecting your E&O exposure.

Over the last few years we have observed an increase in the number of underground storage tank (UST) owners going with State Storage Tank Funds to meet their financial assurance requirements, versus UST Insurance. Most of this is due to aging tanks (25 years or older) which the private insurance industry does not want to insure due to poor claims experience.

What we have also learned, most agents in states with tank funds, believe State tank funds offer the same coverage as private insurance carriers. The reality is, State tank funds are generally designed to meet the bare minimum financial assurance requirements for regulated storage tank owners.

State funds that are still solvent, generally cover clean up but do not offer features included on storage tank insurance policies such as defense cost, third party bodily injury, third party property damage, third party business income and much more.

At ERMI, our strategy is to use State tank funds for troubled insureds, i.e. regulated underground storage tanks 25+ years or older.

Besides being a depository for troubled tank accounts, another benefit for state storage tank funds, involves UST owners when they are getting ready to pull or replace their tanks. If an insurance carrier becomes aware an insured is going to pull a tank/s they will suspend coverage until the tank/s have been pulled and replaced and all testing is completed. Insured’s must notify a carrier if they intend to replace their tanks and there is a question on the UST warranty application that asks if the insured is going to pull or replace any tanks during the policy period.

The fact State tank funds are used for troubled accounts is one reason why so many are financially stressed or have gone out of business. In Michigan, we are on the second version of our State tank fund because the original program ran out of money forcing a lot of tank owners to pay out of pocket for cleanups or go out of business. What is the financial stability of your States tank fund?

A few issues to look for with State Funds are:

•State funds are generally offered on a reimbursement basis so the insured could face large out of pocket expenses vs paying a deductible / SIR.

•Very few State funds offer third party liability (third party bodily injury, third party property damage, third party business income) like UST insurance policies so check to see if your state does.
•Most State funds have a set limit of coverage offered and you can’t buy higher limits, regardless of the number of tanks you have.
•State funds generally exclude loading / unloading.
It’s important you do not sacrifice coverage for your UST insureds by going with a state tank fund because that can create E&O claims for you.

For more information or to strategize on storage tank insurance please contact Angie Marsman at 269-792-1070 or angela@ermi.us.

Note: If you have other team members you would like added to our email list to receive our competitive environmental intelligence please send me their email.

As the link below points out, experts are unsure as to why there has been such a drastic increase in Legionnaires.  Infections by other clinically significant waterborne pathogens that can cause infections include but are not limited to Pseudomonas, Acinetobacter, Burkholderia, Stenotrophomonas, nontuberculous mycobacteria (NTM), and Fusarium, have also increased dramatically.

Legionella and these other environmental-source pathogens are collectively called Opportunistic Premise Plumbing Pathogens (OPPPs).  To date, attention has focused primarily on Legionnaires’ disease, because it’s the only OPPP infection that legally must be reported, but other OPPP infections are gaining prominence.

Pollution insurance policies offer financial assurance in protecting insureds for OPPPs liability.  Pollution insurance policies, besides being more affordable than other forms of financial assurance also cover legal fees, first party clean up, third party property damage, third party bodily injury, third party business income, engineering fees, disposal costs, specialists to assist you in handling a claim and much more.

Businesses with exposure to OPPPs need to have an environmental financial assurance plan in place.  Keep in mind there are many other contaminants that are gaining notoriety, i.e. PFAS, PFOS, Glysophate, Formaldehyde, Silica, Welding Rod Fumes….

https://www.fisherphillips.com/Workplace-Safety-and-Health-Law-Blog/legionnaires-disease-and-other-workplace-infectious-diseases