ENVIRONMENTAL AND TOXIC TORT ISSUES AFFECTING THE INSURANCE INDUSTRY IN 2014 AND BEYOND

Environmental and Toxic Tort Issues Affecting the INSURERS AND Industry in 2014 and beyond

http://metroforensics.blogspot.com/2014/11/environmental-and-toxic-tort-issues.html

• long tail claims (asbestos, pre-1986 pollution, lead paint)
• claims submitted on currently issued policies (failure to properly remediate asbestos, lead, groundwater monitoring, spill clean-up and chemical exposure)
• Nanoparticles, nanotubes, nanotechnology and its parallels with asbestos/environmental litigation
• crystalline silica in hydraulic fracturing sand (frac sand) and other industrial activities
• isocyanates in spray polyurethane foam
• styrene and other VOC off-gassing from composites
• metals (lead, arsenic, chromium (hex), cadmium)
• PCBs in sealants and paints
• Formaldehyde 
• Mercury, UV and phenol emissions from compact fluorescent lamps (CFLs)

 

CANCER-CAUSING SUBSTANCES IN THE WORKPLACE AND HOME -CRYSTALLINE SILICA

Cancer-Causing Substances in the Workplace and Home -Crystalline Silica

What is crystalline silica?

Crystalline silica is a basic component of soil, sand, granite, and many other minerals.  It is used extensively in many industrial applications because of its unique physical and chemical properties.  Quartz is the most common form of crystalline silica.  Cristobalite and tridymite are two other forms of crystalline silica.  All three forms may become respirable size particles when workers chip, cut, drill, or grind objects that contain crystalline silica.  During the last few years, thousands of workers have been exposed to crystalline silica during hydraulic fracturing activities because several thousand tons of pure crystalline silica are injected into the subsurface at every single gas well to keep the shale fractures open.

Sand, the most common size fraction of natural crystalline silica, has many applications. For example, it may be used in foundry castings, Portland cement, abrasives and sandblasting materials, and hydraulic fracturing.  It may also be used as a raw material for the production of silicon and ferrosilicon metals, or as a filter for large volumes of water, i.e. in municipal water and sewage treatment plants.  When sand has more than 98% silica and low iron content it can be used for glass and ceramic production.  Flours are formed by the grinding or quartz, quartzite, sand and sandstone. Flours are very fine grades of crystalline silica and are used in the ceramic and pottery industry, in the manufacturing of chrysotile cement, as a filler in rubber and paints and as an abrasive in soaps and cleaners.

What are the hazards of crystalline silica?

Silica exposure remains a serious threat to more than 2 million U.S. workers, including more than 100,000 workers in high risk jobs such as abrasive blasting, hydraulic fracturing, foundry work, stonecutting, rock drilling, quarry work and tunneling.  The seriousness of the health hazards associated with silica exposure is demonstrated by the fatalities and disabling illnesses that continue to occur in sandblasters and rockdrillers.  Crystalline silica has been classified as a human lung carcinogen. Additionally, breathing crystalline silica dust can cause silicosis, which in severe cases can be disabling, or even fatal.  The respirable silica dust enters the lungs and causes the formation of scar tissue, thus reducing the lungs’ ability to take in oxygen.  There is no cure for silicosis.  Since silicosis affects lung function, it makes one more susceptible to lung infections like tuberculosis.  In addition, smoking causes lung damage and adds to the damage caused by breathing silica dust.

What are the symptoms of silicosis?

Silicosis is classified into three types:  chronic /classic, accelerated, and acute.

Chronic/classic silicosis, the most common, occurs after 15–20 years of moderate to low exposures to respirable crystalline silica.  Symptoms associated with chronic silicosis may or may not be obvious; therefore, workers need to have a chest x-ray to determine if there is lung damage.  As the disease progresses, the worker may experience shortness of breath upon exercising and have clinical signs of poor oxygen/carbon dioxide exchange.  In the later stages, the worker may experience fatigue, extreme shortness of breath, chest pain, or respiratory failure.

Accelerated silicosis can occur after 5–10 years of high exposures to respirable crystalline silica.  Symptoms include severe shortness of breath, weakness, and weight loss.  The onset of symptoms takes longer than in acute silicosis.

Acute silicosis occurs after a few months or as long as 2 years following exposures to extremely high concentrations of respirable crystalline silica.  Symptoms of acute silicosis include severe disabling shortness of breath, weakness, and weight loss, which often leads to death.

Where are construction workers exposed to crystalline silica?

Exposure occurs during many different construction activities.  The most severe exposures generally occur during abrasive blasting with sand to remove paint and rust from bridges, tanks, concrete structures, and other surfaces.  Other construction activities that may result in severe exposure include: jack hammering, rock/well drilling, hydraulic fracturing, frac sand mining and loading and unloading, concrete mixing, concrete drilling, brick and concrete block cutting and sawing, tuck pointing, tunneling operations.

Where are general industry employees exposed to crystalline silica dust?

The most severe exposures to crystalline silica result from abrasive blasting, which is done to clean and smooth irregularities from molds, jewelry, and foundry castings, finish tombstones, etch or frost glass, or remove paint, oils, rust, or dirt form objects needing to be repainted or treated.  Other exposures to silica dust occur in cement and brick manufacturing, asphalt pavement manufacturing, china and ceramic manufacturing and the tool and die, steel and foundry industries.  Crystalline silica is used in manufacturing, household abrasives, adhesives, paints, soaps, and glass.  Additionally, crystalline silica exposures occur in the maintenance, repair and replacement of refractory brick furnace linings.

In the maritime industry, shipyard employees are exposed to silica primarily in abrasive blasting operations to remove paint and clean and prepare steel hulls, bulkheads, decks, and tanks for paints and coatings.

How is OSHA addressing exposure to crystalline silica?

OSHA has an established Permissible Exposure Limit, or PEL, which is the maximum amount of crystalline silica to which workers may be exposed during an 8-hour work shift (29 CFR 1926.55, 1910.1000). OSHA also requires hazard communication training for workers exposed to crystalline silica, and requires a respirator protection program until engineering controls are implemented.  Additionally, OSHA has a National Emphasis Program (NEP) for Crystalline Silica exposure to identify, reduce, and eliminate health hazards associated with occupational exposures.

What can employers/employees do to protect against exposures to crystalline silica?

■ Replace crystalline silica materials with safer substitutes, whenever possible.

■ Provide engineering or administrative controls, where feasible, such as local exhaust ventilation, and blasting cabinets.  Where necessary to reduce exposures below the PEL, use protective equipment or other protective measures.

■ Use all available work practices to control dust exposures, such as water sprays.

■ Wear only a N95 NIOSH certified respirator, if respirator protection is required.  Do not alter the respirator. Do not wear a tight-fitting respirator with a beard or mustache that prevents a good seal between the respirator and the face.

■ Wear only a Type CE abrasive-blast supplied-air respirator for abrasive blasting.

■ Wear disposable or washable work clothes and shower if facilities are available. Vacuum the dust from your clothes or change into clean clothing before leaving the work site.

■ Participate in training, exposure monitoring, and health screening and surveillance programs to monitor any adverse health effects caused by crystalline silica exposures.

■ Be aware of the operations and job tasks creating crystalline silica exposures in your workplace environment and know how to protect yourself.

■ Be aware of the health hazards related to exposures to crystalline silica.  Smoking adds to the lung damage caused by silica exposures.

■ Do not eat, drink, smoke, or apply cosmetics in areas where crystalline silica dust is present.  Wash your hands and face outside of dusty areas before performing any of these activities.

■ Remember: If it’s silica, it’s not just dust.

How can I get more information on safety and health?

OSHA has various publications, standards, technical assistance, and compliance tools to help you, and offers extensive assistance through workplace consultation, voluntary protection programs, strategic partnerships, alliances, state plans, grants, training, and education.  OSHA’s Safety and Health Program Management Guidelines (Federal Register 54:3904-3916, January 26, 1989) detail elements critical to the development of a successful safety and health management system. This and other information are available on OSHA’s website.

■ For one free copy of OSHA publications, send a self-addressed mailing label to OSHA Publications Office, 200 Constitution Avenue N.W., N-3101, Washington, DC 20210; or send a request to our fax at (202) 693–2498, or call us toll-free at (800) 321–OSHA.

■ To order OSHA publications online at www.osha.gov, go to Publications and follow the instructions for ordering.

■ To file a complaint by phone, report an emergency, or get OSHA advice, assistance, or products, contact your nearest OSHA office under the U.S. Department of Labor listing in your phone book, or call toll-free at (800) 321– OSHA (6742). The teletypewriter (TTY) number is (877) 889–5627.

■ To file a complaint online or obtain more information on OSHA federal and state programs, visit OSHA’s website.

This is one in a series of informational fact sheets highlighting OSHA programs, policies, or standards. It does not impose any new compliance requirements. For a comprehensive list of compliance requirements of OSHA standards or regulations, refer to Title 29 of the Code of Federal Regulations. This information will be made available to sensory-impaired individuals upon request. The voice phone is (202) 693–1999. See also OSHA’s website at www.osha.gov.

A SUMMARY OF THE JUNE 1, 2014, NATIONAL FLOOD INSURANCE PROGRAM CHANGES

A Summary of the June 1, 2014, National Flood Insurance Program Changes

1. Change to Maximum Coverage Limits (Section 100204)

In accordance with Section 100204 of the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12), the maximum limits of building coverage available for non-condominium residential buildings designed for use for five or more families (classified as Other Residential buildings by the NFIP) will be increased to match the limits of commercial and other non-residential properties insured under the Standard Flood Insurance Policy (SFIP) General Property Form.  This is an increase of available building coverage from $250,000 per building to $500,000. The maximum contents coverage for all policies covering Other Residential buildings will remain $100,000 per policy.  New premium combinations reflecting this change to the maximum limits for multi-family dwellings have been added to the Preferred Risk Policy (PRP) and PRP Eligibility Extension premium tables (see Attachment B). The new coverage limits are available for new business, renewals, or change endorsements that are effective on or after June 1, 2014.

At least 90 days prior to June 1, 2014, insurers must send the attached sample letter (see Attachment C) to all Other Residential policyholders to inform them of the new maximum limits.  Insurers must also include a message on the Renewal Notice advising affected policyholders that higher limits are available.

2. Revised Primary Residence Definition (Section 100205)

Section 100205 of BW-12 requires FEMA to phase out Pre-FIRM subsidized rates for nonprimary residences.  On January 1, 2013, the NFIP began implementing this provision using an 80-percent occupancy threshold. Effective June 1, 2014, the NFIP will implement this provision by defining primary residence to be a building that will be lived in by the insured or the insured’s spouse for more than 50 percent of the 365 days following the policy effective date.

To be eligible for replacement cost under the SFIP, the dwelling must be the insured’s “principal residence” (i.e., the insured must live in the dwelling for 80 percent of the 365 days preceding the loss), and the dwelling must be insured 80 percent or more of its full replacement cost or the maximum amount of insurance available under the NFIP. If the dwelling only meets the definition of a “primary residence,” and not the definition of “principal residence” in the SFIP, then any claim for building damages will be paid using Actual Cash Value.  References to “Principal Residence” will be removed from the Flood Insurance Application, Preferred Risk Policy Application, and General Change Endorsement forms. See Attachment C for the revised forms.

At least 90 days prior to the policy renewal date, insurers must send the attached notice (see Attachment C) to all Pre-FIRM subsidized residential single-family dwelling policyholders (including condominium unit owners) to inform them of the revised definition of primary residence and the acceptable documentation needed to verify eligibility for the primary residence Pre-FIRM subsidy. Acceptable documentation of primary residence status includes the following:

·         Driver’s license

·         Automobile registration

·         Proof of insurance for a vehicle

·         Voter’s registration

·         Documents showing where children attend school

·         Homestead Tax Credit Form for Primary Residence

If the insurer does not receive the required documentation, the policy must be renewed as a nonprimary residence and will receive the phased-in rate increase required by BW-12.

This change is for new business and renewal Pre-FIRM subsidized residential single-family dwelling (including condominium unit) policies that are effective on or after June 1, 2014. Midterm endorsements are permitted if the policy effective date is on or after June 1, 2014.

3. Deductible Changes (Section 100210)

In accordance with Section 100210 of BW-12, FEMA is revising the minimum deductibles for the NFIP. The changes to the minimum deductibles are available only for new business and renewal policies that are effective on or after June 1, 2014. Insurers must advise affected policyholders of the new minimum deductible option as part of the renewal process, as all deductibles must comply with the new minimums. See Attachment D for the revised deductible tables. The revised minimum deductibles are as follows:

Full-Risk Rated Policies

·         Policies rated with full-risk rates (Post-FIRM, Pre-FIRM elevation-rated, and all X-zone rated policies) or in AR, AR dual, or A99 zones will have a minimum deductible of $1,000 for building coverage and $1,000 for contents coverage if the building coverage does not exceed $100,000.

·         Policies rated with full-risk rates or in AR, AR dual or A99 zones will have a minimum deductible of $1,250 for building coverage and $1,250 for contents coverage if the building coverage exceeds $100,000.

Pre-FIRM Subsidized Policies

·         Policies rated with Pre-FIRM subsidized rates will have a minimum deductible of $1,500 for building or contents coverage if the building coverage does not exceed $100,000.

·         Policies rated with Pre-FIRM subsidized rates will have a minimum deductible of $2,000 for building or contents coverage if the building coverage exceeds $100,000.

Contents-Only Policies

·         Contents-only policies will use the same minimum deductibles that apply to building coverage that does not exceed $100,000.

4. Maximum Coverage Availability for Non-Residential and Residential Coverage and Only One Policy Per Building (Excluding Residential Condominium Buildings) (Section 10228)

Excluding residential condominium buildings, NFIP-insured buildings can have only one policy with building coverage. Section 100228 of BW-12 clarifies that the total and aggregate liability for a non-residential building or non-condominium building designed for 5 or more families is $500,000 per structure to be paid to the building owner. The law also reiterates that the maximum coverage available for a residential 1-4 family building or condominium unit is $250,000 per policy. The NFIP Application forms included in the October 1, 2013, Flood Insurance Manual were updated to collect data specifying when a policy is held by a tenant. If building coverage is purchased by a tenant, regardless of occupancy, the landlord must be named on the policy. The SFIP prohibits duplicate building coverage by the same insured. If building coverage is purchased by an owner, tenants may be named as an additional insureds on the policy. The Application includes a disclaimer stating that “building coverage benefits – except for a residential condominium building – are not available if other building coverage has been purchased by the applicant or any other party for the same building” identified on the Application. This means that the NFIP will only pay for a building loss under one policy where the owner is named on the policy.

For all policies with a policy expiration date on or after June 1, 2014, at least 90 days prior to the policy expiration date, insurers must send a notice (see Attachment C for sample) to the insured and agent for all policies covering residential and non-residential buildings where duplicate coverage is indicated. The insurer must obtain the data added to the October 1, 2013, Application forms pertaining to tenant coverage and building coverage purchased. The information collected must be reported through the Transaction Record Reporting and Processing (TRRP) Plan.

The NFIP will provide insurers with a list of policies that indicate more than one policy for building coverage may have been issued for the same address. The lists are available on the insurers’ FTP site under the FTP folder ftpind/coxxxxx/duppol with the file name of W2RPDUP1 and W2RPDUP2. These lists are not exhaustive. Insurers are responsible for ensuring duplicate building policies are not issued for the same building. Insurers must also include the building owner on the policy and report the appropriate tenant information through the TRRP Plan. If there is more than one building at the same property location, each building must be uniquely identified. If there is more than one policy with building coverage covering the same building, all but one of the policies must be cancelled or endorsed to remove building coverage. If a duplicate policy is inadvertently issued for the same building, the NFIP will pay the building owner and any tenant(s) named on only one policy.

5. Policy Disclosure (Section 100234)

Section 100234 of BW-12 requires each NFIP policy to state the conditions, exclusions, and coverage limitations in plain English, in boldface type, and in a font size that is twice the size of the text of the body of the policy. This provision authorizes the Administrator to impose a civil penalty of not more than $50,000 on any person who fails to comply with this requirement.

Copies of the three revised SFIP forms for use only by the NFIP Direct Servicing Agent are attached to this bulletin (Attachment E). These policy forms use 9-point Arial and 18-point Arial Narrow fonts to comply with this provision of the law.

Compliant policies must be sent to policyholders for all new policies effective on or after June 1, 2014, and upon the first renewal for existing policies on or after June 1, 2014. Under a separate cover, FEMA will provide generic versions of the three SFIP forms for WYO company use. All policies must be issued under each WYO company’s own name and be signed by a WYO company authorized representative.

The previously printed versions of the SFIP forms contained minor variations from the forms promulgated in the Code of Federal Regulations (CFR), 44 CFR 61, Appendices (1), (2), and (3).  Additional details on the variations between the old forms and the CFR will be provided under separate cover with the generic forms.

6. Changes to Declarations Page Requirements

For all applicable policies effective on or after June 1, 2014, the Declarations Pages must display the following:

·         The Declarations Pages for Pre-FIRM subsidized policies must state “Pre-FIRM Subsidized.” This includes:

o   All policies covering Pre-FIRM buildings rated without elevation data from an Elevation Certificate and rated using zones Unnumbered A, AE, A1-A30, AH, AO, VE, and V1-V30, and

o   All policies effective prior to October 1, 2013, covering Pre-FIRM buildings in zones Unnumbered V and D with original new business dates prior to July 6, 2012, and no lapse on or after October 4, 2012.

·         The Declarations Pages for policies covering primary residences must state “Y” when the policy covers a building that will be lived in by the insured or the insured’s spouse for more than 50 percent of the 365 days following the policy effective date. The name of the data element field is changed from “Principal/Primary Residence” to “Primary Residence.”

7. Clarifications Regarding Subsidy Elimination

When transitioning a subsidized Pre-FIRM policy to a full-risk rate, insurers can use tentative rates to rate a policy for one year only. The policy must then be renewed using the information contained in an Elevation Certificate. When applying the tentative rate procedure for an elevated Pre-FIRM building with enclosure, always use “non-elevated/no-basement” building rates.

Tentative rates can be used for one year to transition subsidized Pre-FIRM Residential Condominium Building Association Policies (RCBAPs) to full-risk rates.

Use full-risk (Post-FIRM) Increased Cost of Compliance premiums and deductible factors when applying full-risk, tentative, or provisional rates to a Pre-FIRM building.

8. Clarification of Grandfather Rating Procedures

For rating purposes, an SFIP issued for a condominium unit under the Dwelling Form is independent of the RCBAP. An SFIP issued for a condominium unit under the Dwelling Form may not use the Declarations Page of an RCBAP to demonstrate eligibility for Pre-FIRM subsidized premium rates or grandfather procedures.

9. Renewal Notice Instructions

FEMA is requiring companies to include a message on the back of the Renewal Notice about the advantage of using certified mail to submit premium payments.