Asbestos

Once hailed as a miracle material for its fire-resistant properties, asbestos has now become a silent threat lurking in buildings and structures worldwide. While its adverse health effects are well-documented, the implications of asbestos exposure extend beyond public health concerns. Commercial enterprises face a myriad of challenges when it comes to managing asbestos-related risks, with significant repercussions on their commercial insurance warranties.

Asbestos, a naturally occurring mineral, was extensively used in construction materials due to its durability and fire-resistant qualities. However, the discovery of its link to serious health conditions, including lung cancer and mesothelioma, prompted widespread bans on its use. Despite these regulations, buildings constructed prior to any bans may still harbour asbestos, posing a substantial risk to occupants and the financial health of property owners.

Commercial Insurance Warranties Under Scrutiny:

Commercial insurance policies typically include warranties, which are conditions that policyholders must fulfil to ensure coverage. The presence of asbestos in a property can complicate matters, triggering a series of challenges for businesses in maintaining their insurance warranties.

1. Disclosure Requirements: Commercial insurance policies often require policyholders to disclose any known risks or hazards on their premises. Failure to disclose the presence of asbestos can lead to coverage disputes.
2. Risk Management Obligations: Insurance warranties commonly include obligations for policyholders to implement and maintain risk management practices. Discovering asbestos may necessitate immediate remediation efforts, and failure to do so can breach these obligations, jeopardising coverage.
3. Preventive Measures: Insurance warranties may mandate the implementation of preventive measures to mitigate risks. Businesses should complete asbestos risk assessments to identify the location of asbestos in the buildings and adopt comprehensive risk mitigation strategies such as keeping anything containing asbestos in good repair or have it sealed or removed.
4. Legal Compliance: In the UK,
   • The Health and Safety at Work Act places general duties on employers to do what is ‘reasonably practicable’ to ensure the health and safety of anyone who may be affected by their work.
   • The Construction, Design and Management Regulations include requirements for clients and principal designers to work together in assessing the adequacy of existing information, including an asbestos survey, before starting any construction project.
   • Exposure to asbestos is reportable under the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations (RIDDOR) when a work activity causes the accidental release or escape of asbestos fibres into the air in sufficient quantity to cause damage to health.
   • The Control of Substances Hazardous to Health Regulations require employers to prevent or control worker exposure to harmful substances using effective risk management and good control practices for hazardous substances.
5. Common Issues Related to Asbestos: The presence of Asbestos triggers a number of issues that can have far reaching consequences
   • Latent Employers Liability claims. Identifying the relevant Insurer can often be a significant issue. An employee can develop mesothelioma symptoms some 10 to 40 years after exposure. As a consequence, when a claim is needed to be made it may be the case that there are no records available or employer no longer trading for example. This makes it difficult for the injured person to claim.
     It may be that there are limited records available with gaps. Failing to fill any gaps could make the policyholder liable for a portion of the claim.
     The Employers Liability Tracing Office was established in 2011 to give claimants easy access to their employers liability insurance data. However, if that fails, one can enlist the help of an Insurance Archaeologist who will undertake site visits and review client’s archives looking for evidence of cover, such as premium payments to an insurer.
   • Incurring unforeseen liabilities when purchasing a business. If employees have been moved under a TUPE arrangement, then the acquiring business may inherit unforeseen liabilities such as latent asbestos issues that may raise their head in the future. Proper due diligence needs to be undertaken in conjunction with your Insurance broker and lawyer in advance of any acquisition to mitigate your liabilities.
   • Check your Insurance cover: Under the Debris Removal cover of some Material Damage policies, there is an inner limit of £100,000. Check that you have at least this amount and request a higher limit if necessary.

Navigating the Intersection of Asbestos and Insurance:

To effectively manage the challenges posed by asbestos and protect commercial insurance warranties, businesses must adopt a proactive approach:

1. Comprehensive Risk Assessments: Conduct thorough asbestos risk assessments to identify and address risks promptly. This not only helps in compliance with insurance warranties but also safeguards the well-being of occupants.
2. Transparent Communication: Maintain open communication with insurers, disclosing accurate information about the presence of asbestos. Transparent reporting fosters a collaborative relationship and reduces the likelihood of coverage disputes.
3. Risk Mitigation Strategies: Implement robust risk mitigation measures, including asbestos removal or encapsulation. This not only aligns with insurance warranty requirements but also safeguards the long-term value of the property.
4. Legal Compliance Monitoring: Stay vigilant about evolving asbestos regulations and ensure compliance. Regularly update risk management protocols to reflect the latest legal requirements.

Conclusion:

Asbestos, once woven into the fabric of construction, now poses complex challenges for businesses navigating the intricacies of commercial insurance warranties. Proactive risk management, full disclosure to Insurers, and compliance with legal obligations are crucial elements in safeguarding both human health and the financial well-being of businesses in the face of the asbestos menace. By addressing these issues head-on, businesses can fortify their resilience against the hidden risks that asbestos presents, ensuring a safer and more secure future.

At Castlemead, we have had years of successfully advising and assisting clients in pursing asbestos claims, particularly in relation to latent Employers Liability claims. To speak to an expert email info@castlemead-com

One recent case involved assisting a client in tracing their employer’s liability cover dating back from the late 1970’s to 2015. This involved making enquires with ELTO, previous insurance providers, and reviewing Insurers archives. This ultimately resulted in the claim being settled despite the passage of time.

About Us
Founded in 1987, Castlemead Insurance Brokers is an independent commercial insurance broker, specializing in Corporate Insurance, offering a full insurance broking and risk management service to our clients. Offices in the South-West of England, with clients across the UK, including Scotland and Channel Islands. Castlemead are experts in International Insurance Programmes and are partner members of the GBN Insurance network. We also have an EU subsidiary to aid placing insurance policies with modest EU Insurance risk.