By Amanda Duncan, President, PartnerOne Environmental
Healthcare facilities, from large hospital campuses to corner drugstores, face many potential pollution exposures. These exposures are typically excluded from a General Liability and/or Property insurance policy, so it is crucial that this type of insured acquires additional Site Pollution coverage to cover any possible issues. Environmental concerns that can arise from these sites include, but are not limited to:
- Storage of chemicals/medicines/biological waste causing bodily injury, property damage, or requiring cleanup
- Mold/Legionella resulting from poor indoor air quality, leaks, and equipment damage.
- Over the road spills of medical waste which could damage nearby property, streams, and wildlife.
- Leaking storage tanks causing extensive damage onsite and to neighboring property.
- Non-Owned Disposal Sites; medical waste emanating from a covered non-owned facility.
Pollution policies are available in the environmental insurance marketplace that can be tailored to meet the needs of the healthcare industry. These policies provide coverage for on-site cleanup costs and third party bodily injury, property damage, and cleanup as a result of a pollution condition at, on, under, or migrating from a covered location. Coverage is provided for all locations scheduled onto the policy. Coverage for aboveground storage tanks is built into the policy form; underground storage tanks may be added via endorsement. Transportation coverage for medical waste hauled by the insured or by a contracted carrier can be offered, as well as Non-Owned Disposal Site coverage for the waste disposal. Natural resources damage and Emergency Expenses are additional coverages usually found in a quality policy form. Coverage for Mold and Legionella are common when a product is designed for exposures associated with healthcare facilities.
Target customers who should consider purchasing Site Pollution coverage include: hospitals, physicians’ offices, dental offices, veterinary offices, clinics, drugstores, and imaging centers. Premiums generally start at $3,000 for $1,000,000 policy limits.
Claims Scenarios for Healthcare Facilities:
A fuel oil tank at a medical office leaks, releasing oil into the soil and groundwater and affecting neighboring properties. Local authorities require the hospital to clean up the contamination. The cost for cleanup exceeds $400,000.
A landfill used by a hospital is a source of contamination to a drinking water well located down-gradient from the facility. The hospital is found to be a responsible party as their waste has been disposed of at the landfill for many years.Â The insured contributes over $100,000 to settle the claim.
A medical waste transporter hired by a doctor’s office overturns and waste is spilled into a stormwater drain, contaminating a nearby stream. The cost of cleanup exceeds the transporterâ€™s policy and as the party responsible for generating the waste, the insured is required to pay the remaining costs associated with the cleanup.
Indoor air quality issues stemming from a damaged air conditioning system in a local hospital sickened several patients in which there were two fatalities and several patients in critical condition. Claims for bodily injury exceeded $1,000,000.
As you can see, pollution exposures can be quite significant for various healthcare facilities and any response to a pollution event can become expensive. However, the environmental insurance marketplace offers several affordably priced, quality solutions, providing these facilities proper coverage and peace of mind.