Insurance aspects of asbestos removal work
Jul 16, 2019
Question: Itzick, good morning. We are interested in hiring the services of an asbestos removal contractor, but when we approached asbestos contractors we found that their insurance policies contain an exclusion for anything related to asbestos. When we asked one of the contractors to clarify this, he claimed that all insurance companies, without exception, exclude asbestos under contractors’ works insurance. Are you familiar with this issue, and can you confirm that it is unlikely we will find a contractor without such an exclusion?
question:
"Itzick, good morning. We are interested in hiring the services of an asbestos removal contractor, but when we contacted asbestos contractors, we found an exclusion in their policy for everything related to asbestos. When we asked to clarify this with one of the contractors, he claimed that all insurance companies, without exception, exclude the issue from their insurance for contractor work. Are you familiar with the issue and can you confirm that it is unlikely that we will find a contractor without this exclusion?"
answer
The asbestos contractors are right, there is indeed a problem here. Working with asbestos entails various risks for workers and the environment, and the state saw fit to address this in explicit legislation. Thus, the Law for the Prevention of Asbestos and Harmful Dust Hazards, 5771-2011 and its regulations (hereinafter: the "Asbestos Law") were born. The Asbestos Law stipulates that any construction work involving asbestos requires that it be performed by a licensed contractor (asbestos cement contractor license) and that a permit be obtained from the Ministry of Environmental Protection. These permits are required, among other things, due to the many risks caused by the release of asbestos fibers into the environmental and respiratory space. Working with asbestos is dangerous for workers and the population residing in the area. Therefore, it requires work with a license and while taking a variety of safety measures.
The asbestos exclusion in insurance policies does exist in all of them, but the work can be insured for any other damage (except asbestosis). It is important to understand that asbestosis develops over years and following long-term exposure to the hazardous material. As stated by the Ministry of Environmental Protection, "signs of the disease first appear at least 10 years after the first exposure , and provided that there was significant exposure to high concentrations of asbestos fibers and for several years" (emphasis not in the original). It should be noted that exposure to asbestos has also been shown to be associated with the development of other diseases such as lung cancer and cancer of the lining of the lungs (mesothelioma).
On the other hand, a short asbestos roof removal job, lasting several days (and sometimes one day), does not necessarily increase the risk of developing a disease due to asbestos exposure.
In summary, all you need to do is make sure that you are contracting with a licensed, experienced, and Ministry of Environmental Protection-supervised asbestos contractor. In short-term work, the asbestosis exception is a "minor exception" and should be resolved contractually with the asbestos contractor to minimize it. If contractor work insurance is purchased and an employee or third party is physically injured in an accident while performing the work, there will be full insurance coverage, as the exception relates to asbestosis but not to normal accidents and injuries that occur frequently on a work site, unfortunately. Care must be taken to ensure that the work itself is not excluded from coverage in the contractor's policy and the exception relates only to an insurance event that occurred as a result of asbestosis and as a result of the dangerous properties of asbestos.