How to determine coverage for asbestos losses

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Question: Our insureds sustained a leak in their refrigerator supply line. They explored the leak and pulled up the flooring around the leak. The flooring mastic contained asbestos. The insured, after exposing the mastic, continued living in the home for weeks, using the floor and walking over the mastic. Testing of the home has been done, and it now has asbestos contamination throughout the home. A recommendation exists to pack out the entire house and decontaminate the structure in its entirety.

It appears the insureds actions, and lack of action, contributed to the extent of the loss.

Do the actions of the insured give rise to a subsequent loss, or should the asbestos contamination be attached to the refrigerator leak?

— California Subscriber

Answer: You have an interesting situation. If mold, fungus or wet rot resulted from the refrigerator and this occurred under the floor or behind a wall, there is coverage for that mold/fungus damage. While that section has an ensuing loss provision, which is what the asbestos exposure is, the ensuing loss provision states that ensuing losses are covered unless precluded by other provisions in this policy. Since pollution is excluded, that exclusion is going to override the ensuing loss provision. Therefore, there is no coverage for the loss. The ensuing loss provision is as follows. The emphasis is mine:

Under 2.b. and c. above, any ensuing loss to property described in Coverages A and B not precluded by any other provision in this policy is covered.

Related: 6 tips to prevent construction worksite fall and asbestos exposure risks

Swimming pool asbestos damage

Question: We have an insured with an HO-0003 (04/91) homeowner’s policy.

A neighboring property was having a roof replaced. During the contractor’s removal of the shingles, asbestos from the shingles/roof system somehow migrated into the insured’s in-ground swimming pool, causing damage.

The question is: Is there coverage for this type of loss under the HO-0003 (04/91) policy?

— Massachusetts Subscriber

Answer: The in-ground pool is an other structure, coverage B. As such, coverage is on an open perils basis. There is an exclusion for faulty workmanship, repair, construction of part or all of any property on or off the residence premises; it doesn’t have to be the insured’s property that the repair is to, the policy just says any property on or off premises. While there is an ensuing loss provision that could provide coverage, asbestos is a pollutant and is not covered unless caused by a coverage C named peril. Therefore, coverage for the asbestos in the pool would be excluded. However, the contractor should be responsible for the claim, since his actions caused the loss.

 Asbestos removal and cleanup

Question: Is there coverage under CP 10 30 04 02 or CP 00 01 04 02 for asbestos removal (as debris removal or otherwise) sustained as a result of a covered wind loss?

In other words, does the ordinance or law exclusion exclude coverage for asbestos removal following a covered physical loss to the property?

— Ohio Subscriber

Answer: Not knowing the actual loss sustained, we see two possibilities:

1. Due to the windstorm, asbestos was released and scattered from the building. In this case, the additional coverage for pollutant clean up and removal would apply.
2. Following the wind damage to the building, a law or regulation required the insured to remove the asbestos before the building can be repaired or rebuilt. In this instance, the ordinance or law exclusion would prevent coverage for the asbestos removal.

Related: Understanding debris removal coverage, costs and settlements

Asbestos dust removal under a condominium policy

Question: Our insured resides in a condo in a building that recently sustained a fire loss. Many of the ceilings collapsed. It was found that the ceilings had an asbestos-based, sprayed-on finish, and an asbestos abatement company had to be brought in.

The building insurer agreed to pay for the environmental cleaning but does not want to pay to remove the plaster and asbestos dust that has settled on the insured’s personal property. They say that is the responsibility of the unit owner. We think the dust should be removed before the unit owner’s personal property coverage under his HO-6 is triggered to apply to the smoke and water damage.

Your thoughts?

— Connecticut Subscriber

Answer: Without having the condo master policy form, we are of necessity basing our response on an ISO CP 00 17. It appears that the insurer for the condo building is thinking “debris” is something that need only be removed from the commonly-owned property. But this is not what the policy says. The policy simply says that the insurer pays for “your expense to remove debris of Covered Property caused by or resulting from a Covered Cause of Loss that occurs during the policy period.” Nowhere does the language state that the coverage is limited to debris—in this case, the asbestos and plaster dust — that only settles in certain locations. The covered property in this instance is the ceilings; the cause of loss, a fire. The ceiling debris should be removed under the condo policy, not the unit owner’s.

The HO-6 insurer should not pay the cost for removal of the dust. The HO-6 promises to pay the reasonable expense for the removal of “debris of covered property,” but that is not the same as removal of “debris on covered property.” These are two distinct items.

See also:

Additional Living Expenses: Just how much is covered?

Insurance questions grow alongside mold, fungi and algae