Healthcare facilities face some of the most significant pollution risks of any industry. Mold, Legionnaires’ disease and hazardous or medical material spills can have devastating - and even fatal - effects on nursing home residents, hospital patients or even third parties visiting loved ones.
Common pollution exposures found in healthcare facilities include:
- Improper handling of medical waste
- Low-level radioactive contamination from medical equipment
- Improper disposal of medication
- Food preparation area contamination
- Facility-based viral/bacterial outbreaks
- Laboratory accidental releases
- Fumes from paint, new furnishings and cleaning chemicals
These and other common pollutants have led to numerous high-profile, costly bodily injury claims in recent years. The hospital or senior care facility owner or operator can be held liable for alleged failures to be proactive in pollution prevention. Pollution claim costs are often significant. They can include claims of bodily injury, clean up and facility remediation costs, business interruption, defense costs and more.
Unfortunately, these claims may not be insured in standard property and casualty policies. An “absolute pollution exclusion” is included in 98% of General Liability (GL) policies, and is designed to exclude coverage for any type of environmental-based event. Virtually any substance that could possibly be considered hazardous and is involved in a contamination event could be used by an insurer to deny coverage under the pollution exclusion.
Pollution insurance coverage for healthcare
Because the pollution risk is so serious, and uninsurable on most GL policies, healthcare operators often purchase a stand-alone environmental insurance policy that provides coverage for healthcare pollution risks.
Pollution liability insurance covers unknown conditions and can offer some degree of coverage for known conditions that are not yet actionable at law. This can include coverage for remediation of conditions and related restoration costs.
Pollution insurance is written to broadly cover both first and third party damages arising out of the release, escape or dispersal of an irritation or contamination event, including:
- Cleanup costs at, or emanating from, the insured’s location
- Bodily injury and property damage claims
- Legal defense costs and non-criminal fines and penalties
- Business interruption costs/loss of rent due to the pollution condition
- Restoration costs to bring the facility back to normal conditions
In addition to protecting financial assets, pollution insurance will also provide the specialized technical and legal expertise required to respond to pollution events and lawsuits that are typically not available to owners and managers through their professional advisors.
Because environmental insurance does not have a standard policy, it is critical to work with an experienced broker who can negotiate appropriate definitions of “pollutant” and limit exclusions based on business activities and unique pollution risks.
Contact your HUB Healthcare expert for more information on how you can secure pollution insurance for your organization.