COVID-19 Risk Tolerance and your PLL Insurance Policy

As EHS professionals, we are accustomed to identifying and quantifying environmental risks for stakeholders and team members based upon scientifically proven exposure concentrations that lead to specific screening levels and standards. For example, the water we drink is regulated by the United States Environmental Protection Agency (USEPA) Maximum Contaminant Levels (MCLs) and workplace indoor air[1] conditions are covered under Occupational Safety and Health Administration (OSHA) Permissible Exposure Limits (PELs). Insurance companies box environmental risks by writing coverage like pollution legal liability (PLL) policies. PLL policies are designed to be effective environmental risk management tools that provide coverage from past, current, and future environmental issues. These standards may also be used by carriers to frame conditions or exclusions in a policy that, should they arise, result in an environmental claim they will pay.

Now there is a new environmental risk to consider in the workplace: COVID-19, caused by the novel coronavirus.  Is the virus a “pollutant” covered by these policies as a “pollution condition”? From a worker-safety perspective, how do we determine what is an acceptable risk to our employees for an invisible pollutant such as the virus with a traditional environmental exposure risk scenario?

The roots of EHS consulting and engineering revolve around a simple set of criteria: The USEPA generally deems health risks to be significant if an individual’s lifetime cancer risk from a specific contaminant exceeds the USEPA acceptable cancer risk range of 1 × 10⁻⁶ to 1 × 10⁻⁴ (1 in 1,000,000 to 1 in 10,000). Risk assessments are used to determine the probability that an adverse health effect (i.e. cancer) may occur in a population exposed to a toxic agent; however, they cannot determine whether any one individual will become ill after an exposure to an agent and therefore are a basic predictive resource to estimate potential accidental exposures.

Using the traditional risk determination mindset to examine specific contaminant exposure levels, let’s compare a COVID-19 scenario with the USEPA approved MCL for a nonspecific chemical. Consider a recent virus situation from Southwest Georgia (a fourteen county region) where 206 COVID-19 deaths were recorded from a total population of 343,813[2]. Ignoring other risk factors, you have greater than 1 in 1,700 chance of dying from COVID-19 if you are part of this population[3].  Compare the above chance with the commonly accepted cancer risk range (1 in 10,000 to 1 in 1,000,000) that has been established for the contaminants in the environment. 

If this were a Cornelian dilemma and you lived in this community, which scenario would you allow in your workplace?

• Permit a worker to drink water with a carcinogenic contaminant at the USEPA approved MCL with the commonly accepted cancer risk range of 1 in 10,000 to 1 in 1,000,000; or.
• Allow a worker to stand close to a person that might have COVID-19 and have a 1 in 1,700 chance of dying.

Without a doubt, employers and facility EHS personnel are working tirelessly to keep operations running and maintain a safe environment for their employees and facility during the COVID-19 pandemic. Some have questions, like whether or not COVID-19-related claims are covered under existing PLL policies? What happens when one or more workers at a facility test positive for COVID-19 and immediate measures to “disinfect” or “decontaminate” a facility are completed?  What options are available through existing insurance products for covered properties? The answer is complicated and depends on specific policy-by-policy language and exclusions.

Policy language related to coverages and exclusions may open or close the door for COVID-19-related claims.  Your insurance product may have exclusions for communicable diseases (i.e. virus, bacteria, or biological-related language) and COVID-19 related claims.

Pollution coverage may be written to include cost recovery for disinfection or decontamination events in connection to the transmission, dispersal, or release of bacteria or viruses.  Even with affirmative coverage for disinfection expenses, specific policy language may limit coverage and could require a mandate from a government agency or health department to trigger coverage. Furthermore, cleanup costs are only provided for scheduled properties as part of a policy.  The key take-away is that you should read your policy immediately.

If your policy language opens the door for coverage, document everything and alert your carriers as soon as possible. When in doubt, consult with legal counsel and an experienced environmental insurance professional to help you review policy language. Entire companies and individual facilities are taking rightful measures to limit exposure risks at a cost to productivity and profitability during these unprecedented times. It is yet to be seen how claims will play out with respect to COVID-19; however, a new wave of pollution claims could change the way policies are written for the foreseeable future.

Sources

[1]OSHA promulgates regulations governing worker exposure including PELs that provide acceptable exposure limits for indoor air quality and worker safety. Vapor intrusion (VI) differs from the above in that volatile compounds in soil and groundwater migrate into an overlying building. 

[2]Data collected on April 21, 2020. John Hopkins University COVID-19 Status Report

[3] Older adults and people with chronic health conditions are at higher risk. National Foundation for Infectious Disease.