Contractors

Appliance

Appliance contractors can face many environmental risks. During installation, a contractor may encounter asbestos in wall cavities or floor tiles, or lead in associated plumbing, resulting in an accidental disturbance and release. Loose fittings or improper connections can cause water leaks resulting in mold growth. Appliances and associated equipment can contain hazardous components, including lead, mercury, and freon, which can be toxic on exposure and require special disposal procedures.

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Environmental Exposures May Include:

Asbestos-containing Materials
Asbestos Disturbance
Mold
Lead
Metal Fumes
Halocarbons
Appliance Disposal
Combustion Pollutants
Scale Removal Chemicals

Asbestos-containing Materials

Appliance contractors can face many environmental risks. During installation, a contractor may encounter asbestos in wall cavities or floor tiles, or lead in associated plumbing, resulting in an accidental disturbance and release. Loose fittings or improper connections can cause water leaks resulting in mold growth. Appliances and associated equipment can contain hazardous components, including lead, mercury, and freon, which can be toxic on exposure and require special disposal procedures.

Asbestos Disturbance

Installation may inadvertently disturb existing asbestos in wall cavities, piping, electrical motors, flooring, and wire insulation. Inadvertent disturbance by installation work can cause an airborne release of fibers, affecting nearby workers or the public, resulting in cleanup and potential third-party bodily injury and toxic tort claims.

Mold

Mold is a common problem affecting installation contractors. It develops where water intrusion has occurred, and two main causes of water intrusion are 1) the work conducted disturbs an existing system causing leaks, and 2) the newly installed work develops a leak. Exposures may result in property damage and bodily injury, including respiratory allergies and asthma.

Lead

Rehabbing piping may disturb existing lead in pipes, creating a pathway for lead to enter drinking water and be ingested by the public. Similarly, solvents used in the plumbing “hook up” process may degrade existing lead pipes, creating a pathway for lead to leach into the water.

Metal Fumes

During soldering, brazing, and welding work, metal fumes are produced and released into the air and can be readily inhaled. Some metals are also present in the flux or pastes used. If not properly vented or controlled, metal fumes can injure third parties.

Halocarbons

Some appliances contain halocarbons, manufactured products that contain fluorine, carbon, and hydrogen, and may contain chlorine. These include chlorofluorocarbons (CFC), hydro chloro-fluorocarbons (HCFC), and hydrofluorocarbons (HFC). Freon is the commercial name of a refrigerant gas containing halocarbons used with air conditioning, refrigeration, and dehumidification. Release and exposure to these compounds may occur during installation or maintenance work or from leaks, causing bodily injury.

Appliance Disposal

Hazards associated with the disposal of appliances and electronic equipment include heavy metals, cathode ray tubes, circuit boards, mercury switches, batteries, and PCBs. Improper handling or disposal of these wastes can lead to regulatory fines and tort liability for an appliance contractor.

Combustion Pollutants

Combustion appliances burn fuels for warmth, cooking, or decorative purposes. Typical fuels are gas (natural or liquefied), kerosene, oil, and wood. Examples include ranges, ovens, stoves, furnaces, fireplaces, water heaters, and clothes dryers. When in operation, these appliances produce combustion pollutants, including carbon monoxide and nitrogen dioxide, and improper installation can lead to releases that cause bodily injury or even death.

Scale Removal Chemicals

Poor appliance connections and appliance efficiency may lead to accumulating scale build-up. Cleaners or scale removal chemicals contain one or more acids, such as sulfamic, hydrofluoric phosphoric, or hydrochloric acid formulations. Mishandling of these chemicals could lead to a violent reaction, corrosive damage, or release of toxic vapors if mixed with other chemicals.

Contractors Pollution Liability Can Provide Coverage For:

Contracting operations performed at a jobsite

Contracting operations completed “by or on behalf of” the insured

Third-party claims for bodily injury and property damage

Third-party claims for cleanup

Defense of third-party claims

Mold, fungi, legionella, viruses, and bacteria

Sudden and accidental coverage for owned/leased locations

First and third-party transportation pollution liability

Loading and unloading

First-party emergency response costs

Lead and asbestos

Non-owned disposal sites

Claims Scenarios & Examples

Of several upper-floor units for a high-rise condominium renovation project. During the work, the contractor used incorrect fittings between the existing and new piping, which were different. Because of this, water seeped between wall cavities and to the lower floors, resulting in mold growth. Mold remediation and restoration costs surpassed $500,000.
A heating appliance contractor worked on a heating and snow melt system for a residential location. Carbon monoxide leaked from the system and killed the family in the home while they slept. An investigation found a disconnection in the system, and the PVC piping was not properly glued together, which caused the leak. Extremely high levels of carbon monoxide were found in the home.
A contractor improperly installed the plumbing for a refrigerator’s ice makers and water dispensers. Mold grew as a result, and a $20 million class action lawsuit was filed. The company’s general liability insurance carrier denied the claim due to their policy’s absolute pollution exclusion.
An appliance repair contractor prepared a water heater at a residential home. The contractor installed a flexible connector that was somewhat long and caused the connector to be curved and coiled so that it was in contact with the exterior of an adjacent furnace cabinet. Operation of the furnace over time caused friction between the connector and the furnace cabinet, resulting in a gas leak. The connector catastrophically ruptured, causing extensive property damage in the residence. The homeowner sued the appliance repair contractor for property damage.
A contractor installed a new water heater and removed the old water heater and associated piping from an older home. The contractor did not test the insulation around the old tank or the piping for asbestos before removal. It was later discovered that the insulation contained asbestos, and the contractor had released asbestos fibers to the rest of the house. The homeowner sued the contractor for cleanup costs related to the pollution caused by the disturbance of asbestos.

Final Consideration

As a contractor you can be faced with the cost to defend yourself against allegations or legal action from pollution related events, regardless if you are at fault or not. Having the proper insurance coverage in place will help fund the expenses incurred to investigate or defend against a claim or suit and provide you with environmental claims handling expertise.

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This environmental risk overview is intended to provide the reader with a broad range of potential risks they may encounter and may not reflect all of the risks associated with their business.