ERP - Environmental Risk Professionals

Asbestos-Containing Material (ACM)

Older buildings may contain asbestos. Asbestos-containing material (ACM) may be present in duct insulation, piping, furnaces, boilers, tanks, and fireproofing insulation. ACM may also be present in ceilings, walls, flooring tile, and mastic. Tort claims may result from accidental disturbance or alleged exposure during renovation, construction, or interior remodeling.

Lead in Paint or Pipes

Lead could be present in paint or pipes. Lead in pipes can get into drinking water, and paint chips and dust from lead-based paint can be ingested. Lead exposure can cause significant bodily injury. Exterior lead-based paint can also leach into the soil around the structure, resulting in cleanup liability.

Legionella and Mold/Fungi

Bacteria such as legionella and mold/fungi can be transported through water sources, ventilation systems, and other means, representing serious health risks. Mold can develop in building materials from water intrusion or high humidity. Legionella is a bacterium that causes a form of potentially fatal pneumonia. Legionella can thrive in water-containing systems like large air conditioning, plumbing, water heating, and industrial water cooling systems. These pollutants can potentially lead to claims of severe bodily injury or significant remediation costs.

Property Contamination from Hazardous Chemicals

A growing problem for owners/landlords/managers is methamphetamine manufacturers who move frequently and often leave behind contaminated property. The hazardous chemicals used to make meth, and those produced during the manufacture of the drug, can seep into floors, ceilings, walls, and ductwork and remain for years.

Indoor Air Quality and Building Health

Sick Building Syndrome refers to a situation where building inhabitants suffer from health problems that occur and are aggravated while in a building. It is often attributed to poor design or maintenance of a building’s ventilation system. Exposures contributing to a potentially unhealthy indoor environment include asbestos, lead-based paint, mold, bacteria, formaldehyde, nitrous dioxide, carbon monoxide, radon, pesticides, pollen and viruses, and various volatile organic compounds.

Illegal Waste Disposal

Illicit abandonment, also known as midnight dumping, is the illegal dumping of pollutants on your property or jobsite. It can become the property owner’s burden for cleanup and third-party bodily injury or property damage if law enforcement cannot find the originator of the waste.

Storage Tanks

Underground and aboveground storage tanks typically store materials such as petroleum products and chemicals. Smaller volumes of maintenance, pool, cleaning, and grounds maintenance chemicals may be stored in containers or equipment. Spills can occur from storage or during the loading and unloading of chemicals and wastes. Leaks or a malfunction of equipment, pumps, valves, and pipes can also cause a release of the contents. Improper or no secondary containment can allow contents to leach into the underlying soils and groundwater, collect in run-off, or migrate off-site or into storm drains, sewer drains, drywells, or surface waters.

Existing Contamination

Existing soil or groundwater contamination may be present on, under, or adjacent to an apartment or condominium building from historical operations, former heating oil tanks, releases from off-site properties that migrate onto the property, etc. A property owner may become liable for cleanup or third-party claims related to existing contamination under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).

Pool Chemicals

Pool chemicals are highly concentrated and typically very reactive. Misuse, over-application, improper storage, and spills or leaks of pool treatment chemicals can create cleanup liability and health hazards to third parties. Leaks or spills from improper storage and handling could contaminate drinking water sources or damage ecosystems or aquatic life if the chemicals migrate to surface waters or wetlands.

Maintenance Chemicals

Pesticides, herbicides, fertilizers, and insecticides may be stored and applied at the property for landscape maintenance. Overuse, misapplication, spills, or containment leaks can cause health impairment to third parties and can contaminate soil, groundwater, or surface water on-site or off-site. Nitrogen and phosphorus in fertilizers can cause excess algae blooms that damage ecosystems and aquatic life.

Hazardous Waste Disposal

Owners of apartments retain cradle-to-grave liability for their waste. Improperly segregated and disposed of wastes can result in regulatory fines or lead to cleanup and environmental tort liability. Wastes classified as hazardous or requiring special handling may include restaurant grease, used oil and antifreeze, lead-acid batteries, fluorescent bulbs, and pesticide waste, which can include leftover spray solutions and excess pesticides.

Environmental Pollution Liability Can Provide Coverage For

On-site cleanup of new and pre-existing pollution conditions

Off-site cleanup of new and pre-existing pollution conditions

Third-party claims for bodily injury and property damage

Defense of third-party claims

First-party emergency response costs

Both sudden and gradual pollution conditions

Mold, bacteria, legionella, and more

Aboveground and underground storage tanks

Civil fines and penalties, where allowed by state law

Business interruption resulting from pollution conditions

First and third-party transportation pollution liability

Loading and unloading

Illicit abandonment

Non-owned disposal sites

Asbestos and lead

Natural resource damage

Claims Scenarios & Examples

While selling an apartment building, the owner performed a due diligence assessment and learned that an underground plume of contaminants from a nearby property had impacted their site, resulting in vapor intrusion into several of their buildings. Unfortunately, the source of contamination was an orphaned site, so the apartment building owner had to pay the entire cost for the vapor mitigation system and faced the possibility of future bodily injury claims from tenants.

A multi-story building with retail space and apartments had extensive mold growth. The cause was alleged improper maintenance of the building’s HVAC system. The previous and current tenants sued the building owners. The building owners paid more than $10 million for remediation, bodily injury, property damage claims, and other expenses.

Two residents at an apartment complex contracted Legionnaires’ disease. An investigation was done and found Legionella in the complex’s water supply. Remediation of the complex’s water system was required. The residents sued the apartment complex owner for bodily injury.

Twenty-three women, many of whom were university students, were sickened and hospitalized by a carbon monoxide leak at an apartment building. Authorities believed the leak was caused by a faulty valve on a water heater in the women’s laundry room.

Almost 1,800 gallons of heating oil spilled in an apartment complex utility room and seeped into the floor drain and a storm basin. After experiencing a heavy rainstorm, the oil flowed downhill into an apartment parking lot and playground. Extensive cleanup was required.

Fertilizer was applied to the lawn at an apartment complex. The fertilizer migrated off-site and into the pond on a neighboring property. It cost over $50,000 to restore the pond.

A new owner of an apartment complex discovered that the apartment was built on previously contaminated property. Former USTs received closure; however, the State reopened the case due to new groundwater and soil vapor regulations. The DOE required additional sampling of the groundwater and soil vapor. Costs exceeded $93,000.

After an apartment unit was vacated, the owner of the building discovered that the renter had left behind an illegal meth lab and related chemicals. The owner had to clean up the contaminants that had been released into the room and pay to remove the leftover chemicals. Cleanup and disposal costs were over $100,000.

A woman moved into an apartment complex that had evidence of a leaky roof. She was later diagnosed with chronic inflammatory response syndrome caused by mold that had grown in the apartment due to the leaking roof. The woman sued the building owner, the complex’s management company, and the roofing company. The jury awarded her $48 million.

A mechanical contractor removed ductwork from several apartment units. It was later determined that the ductwork was home to a dangerous fungus. The dismantling activities and the on-site storage of dismantled ductwork caused the fungus to spread throughout the apartment building. Bodily injury and property damage claims exceeded $1 million. Even though the building owner was not at fault, they encountered legal defense and claims management expenses.

Property Types

Apartments

Environmental Exposures May Include: