INSURANCE MARKETPLACE SOLUTIONS
Asbestos Abatement Contractors
If you take it down, they must come.
Most buildings built prior to 1980 contain asbestos. When those buildings are demolished, renovated, or repaired, there is a strong possibility that asbestos fibers will be released. Since asbestos was discovered to be a carcinogen, federal law has required that a licensed contractor either remove or encapsulate any on-site asbestos that will be disturbed by such activities.
These same buildings often contain mold and/or lead, so many asbestos abatement contractors have expanded their expertise to remove these contaminants.
In large part because of strict federal regulations and guidelines for asbestos abatement, insurance for this class has become significantly more affordable and available than it was in the past. Insurance carriers, intermediaries, and retail agents and brokers are more knowledgeable about asbestos abatement exposures, so this once difficult exposure has become almost commonplace.
Environmental remediation contractors operate throughout the nation; however, premiums vary significantly by region. The highest amount of premium is in the Northeast, while the lowest is in the Midwest. The growth rate of this class also varies by state and region. The projected overall growth rate for this class over the next two years is almost 9%, but in Tennessee the projected growth rate is 23% while in New Jersey it is projected to drop by almost 2%.
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STATING THE OBVIOUS
The job of asbestos abatement contractors is to identify and then remove and dispose of asbestos-containing building materials.
Contractors must be able to remove materials that contain asbestos in such a way that its fibers are not released into the environment. A single mistake can contaminate the building and even an entire neighborhood.
An asbestos abatement contractor must be skilled, patient, and well trained because any lapse in procedure can result in a painful and lingering illness to the workers performing the job and members of the public who might inhale the fibers.
The illness that is most closely associated with the ingestion or inhalation of asbestos fibers is mesothelioma, a serious form of lung cancer. Because the disease can take decades to manifest, claims are still being filed today by people who worked with or were otherwise exposed to the fibers as long as 40 years ago.
THE HEART OF THE MATTER
Here is a possible scenario:
After working five years for an asbestos abatement contractor, Marcus decided to start his own business. As a new venture, he accepted a project that his previous employer would not have taken because of the lack of control he would have over the site. Marcus chose to take the job because he needed the revenue in order to make payroll.
The project itself was well within the capabilities of Marcus and his crew; they were to remove the asbestos from a building that subsequently was to undergo a total renovation.
The aspect of the job that made Marcus nervous was that he had to remove the asbestos while the business that occupied the building continued operating. His plan was to encapsulate the asbestos and then remove it.
He carefully planned his approach and sealed off the portion of the building from which he would be removing the asbestos. All was going well until an employee of the building’s occupant lost control of his forklift and broke through the barrier and then through an encapsulated portion of asbestos. Asbestos fibers were released throughout the building and into the air outside. The building owner, the owner of the occupant business, and Marcus were all sued. Fortunately, Marcus had coverage for asbestos contamination.
THE MARKETPLACE RESPONDS
Cathy Griffin, vice president and casualty environmental broker for Partners Specialty Group, LLC, sets the stage for our topic this month by explaining: “Since it was discovered to be a carcinogen, the use of asbestos in building materials has either been banned or strictly regulated by federal and state agencies. Any building that was constructed after 1980 most likely contains no materials with asbestos in them.
“Asbestos abatement contractors are in demand because so many pre-1980 buildings contain asbestos that must be removed before the building can be demolished or renovated,” Ms. Griffin continues. “Asbestos was commonly used in roofing shingles, ceiling and floor tiles, and as a wraparound for piping. The law requires that asbestos testing and removal be done before demolition to prevent the fibers from becoming airborne.”
Asbestos abatement contractors also may remove other environmental contaminants. Gavin McMorrow, senior brokerage underwriter at Insurance Innovators, Inc., says, “I see environmental remediation as being in two main categories – what I call wet and dry. Most dry environmental remediation services include asbestos, lead paint, and some mold. Most wet remediation companies deal in chemical cleanup, soil tainted from storage tanks, and so on.
“The equipment used for wet remediation is different from that used in dry remediation,” Mr. McMorrow explains. “Contractors in both groups must understand the properties of the pollutants they are dealing with. How will the pollutant affect the area and the workers; what equipment, materials, and procedures are required for cleanup; and what risks and hazards may the work involve?”
Adds Ms. Griffin: The protective clothing and equipment used in asbestos abatement are expensive, and they also can be used in lead and mold abatement, so many contractors perform all three kinds of abatement. About 95% of the contractors we insure do asbestos, lead, and mold abatement.”
The market for asbestos abatement contractors is strong. ACE Westchester, American Safety, Berkley Specialty, Chartis, Colony, Crum & Forster, Endurance, Everest, Freberg Environmental Insurance, Liberty, Markel, Navigators and Zurich are active markets for general liability, professional liability, and contractors pollution liability.
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WHO WRITES ASBESTOS ABATEMENT CONTRACTORS?