When most people think about pollution exposures, this probably conjures images of smokestacks in manufacturing plants, oil cans leaking fluid, or underground storage tanks. But what about exposures that often can’t be prevented or even seen? And how do pollution exposures affect schools?
While assessing the need for pollution coverage, you might be wondering how much exposure your school actually faces. It’s easy to say, “We don’t have any storage tanks to worry about,” or “Our maintenance procedures are well-established and reduce our chance of any pollution exposure.” While these statements might be accurate, there’s still a risk that there is significant exposure outside of what you might initially think.
Many schools think they can rely on their property and general liability policies in the event of a pollution instance, but few understand the danger in this assumption.
Let’s look at some common claims examples that specifically apply to schools:
School Expansions/Renovations: Not Always as Clean as You Hope
During a planned expansion project, a school district demolished a middle school built in the 1940s to build a new school in its place. During excavation activities, builders discovered a previously unknown underground storage tank. Findings from an environmental study indicated soil contamination from the tank. The study also found localized groundwater contamination on the school’s property and at two adjacent residential locations that used wells.
Due to the pollution coming from the school’s premises, the residents inhabiting adjacent areas filed bodily injury and property damage claims against the school district. The school district paid to excavate contaminated soils and hired a specialized hazmat contractor to properly dispose of the soil. During this time, the two adjacent residents were provided hotel accommodations. Groundwater remediation and monitoring continued until the State provided clean closure of the site.
I Feel Sick: Mold Claims & The Importance of Good Maintenance Plans
Claims of bodily injury from mold have consistently hit the headlines, some as recent as February 1st, 2022 when Topsail Middle School in Hampstead, North Carolina received a report from concerned parents citing sickness of their children was due to poor indoor air quality and mold.
In another instance, city inspectors received notice of possible building violations at a private boarding school. Inspection of the facility found the building’s roof and interior were in violation of city codes. The violations were serious in nature and included signs of water damage on ceilings, light fixtures, and electrical switches.
Additionally, several students reported a moldy, mildewy odor. Further investigation discovered black mold within the ceiling tiles, under layers of peeling paint, and in areas of noticeable water leakage. Resident students were showing symptoms of being sick due to the mold, including rashes, headaches, asthma, and difficulty breathing. The facility had to be temporarily shut down and the resident students relocated before cleanup of the extensive mold could begin. Claims for bodily injury followed shortly thereafter.
What’s That Smell – Or Lack Of? Carbon Monoxide & Other Gases
Carbon monoxide is perhaps one of the most complicated frequent pollution claims, as court precedent isn’t completely clear when it comes to these cases. Washington State has proposed several laws around Carbon Monoxide Alarms (RCW 19.27.530), but the courts have yet to outright rule on a carbon monoxide claim from a pollution perspective.
In other areas of the country, the results have been mixed. However, the majority of jurisdictions have found that carbon monoxide is outside the definition of a “pollutant.” The majority of these cases have focused not on the definition’s wording but on the more abstract concept of “reasonable expectations.” This is not a definitive response, nor an indication about how Washington will decide.
Courts have found cases involving exposure to toxic fumes as challenging as their natural counterparts. Much of the confusion in this area relates to whether a normal everyday product can become a “pollutant” through improper use and when that pollutant becomes such.
The Washington Supreme Court has answered some legal questions about fumes that emanate from everyday materials. In Quadrant Corp. v. American States Insurance Co., the plaintiff claimed bodily injury from fumes that originated from waterproofing materials being applied to her building. The court not only looked to the plain meaning of the term “pollutant,” but also whether it was acting as a pollutant with respect to the harm alleged in the claim. The court held that the fumes were pollutants and that it was their irritating, contaminating, or polluting qualities that caused the injury.
This Tastes Funny: Untreated Wastewater Accidental Release
A processing tank at a wastewater treatment plant malfunctioned, discharging a large volume of untreated wastewater into a nearby stream. The discharge killed fish and damaged many aquatic plants. The local regulatory authority issued fines to the operator of the wastewater treatment plant for the unauthorized discharge. Additionally, several local residents and environmental groups filed lawsuits for loss of enjoyment of the creek.
While some schools and universities have their own wastewater treatment center, whether for use or for educational purposes, other schools have utilized a form of treated wastewater in the irrigation of their premises or have taken field trips to wastewater treatment facilities themselves. This has led to claims of bodily injury to students from inhaling or ingesting these wastewater contaminants.
For example, a group of high school students used to run on the track while the football field was being irrigated, and in the course of their track practice inhaled some of the water from the sprinkler system. This resulted in sickness claims from the students.
In another instance, parents of students visiting a local wastewater treatment facility claimed bodily injury when their children got sick from the fumes at the plant. Because this was a sanctioned school trip, both the school and the wastewater treatment plant were sued.
Artificial Turf: Cheap to Maintain but Potentially Harmful to Users
More and more schools and universities are replacing grass fields with artificial turf. However, the chemical compounds used in such artificial turf come with hidden dangers and health hazard concerns.
Studies on artificial turfs and their chemical compounds have raised serious health and regulatory concerns. Scientists have found harmful chemicals in a significant amount of samples they’ve tested, including PFAs, chromium, and lead. Arsenic and cadmium were also detected in most samples. The toxic chemicals found in the study are known to harm human health. Exposure to PFAs can cause cancer.
So… Do My Property & General Liability Respond to These Claims?
Most General Liability policies exclude coverage for claims arising from pollutants, including fumes and fungi. A standard ISO General Liability policy excludes such coverage but provides an exception for claims arising from a hostile fire (for bodily injury claims from smoke or vapor inhalation). However, some General Liability markets are attaching Total Pollution Exclusions to remove that exception, which can cause a serious gap when a fire loss occurs.
Similarly, most individuals (insureds and brokers alike) tend to focus on the third-party liability claims from pollution policies and forego the first-party property coverage analysis.
Claims for Debris Removal and Clean Up as a result of pollution-related events, as well as Business Interruption losses due to temporary suspension of operations during the cleanup process can, and often should, be endorsed onto a pollution policy, as they are normally excluded under a traditional Commercial Property Policy. For example, did you know that the period of restoration, which is the period of time that determines when your business interruption coverage starts and ends, does not apply in a scenario when the EPA requires you remain closed after the property is restored for further monitoring of “pollutants” due to the contamination?
Because these intricacies are hard to understand and keep track of, it’s important that you and your board turn to your trusted brokerage firm and advisor to help you properly navigate these exposures.
We have proven experience addressing pollution exposures in tandem with the totality of risks your organization faces.
Contact us today to build a holistic risk management strategy that helps protect your students, employees, and organization
This material has been prepared for informational purposes only and was generated from information provided to BKS from the client and/or third-party sources. Therefore, BKS makes no warranty or representation(s) as to the accuracy or appropriateness of the data and/or the analysis herein. This information is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your tax, legal, and accounting advisors for those services.