ERP - Environmental Risk Professionals

Asbestos Disturbance

Asbestos was used in many electrical materials, including wiring insulation, panel components, motors, and cables, which utilized asbestos-based fabrics and gaskets for insulation and fire protection. Release during decommissioning or maintenance can occur. Other materials known to contain asbestos include ceiling and floor tiles, insulation, and roofing materials. Drilling to access wiring and install conduits can inadvertently disturb existing asbestos and release inhalable fibers that can result in cleanup and potential toxic tort claims.

Release of Existing Contaminants

During installation and repair, existing pollutants could be inadvertently disturbed, including lead-based paint, mercury, which can be found in electrical switches and compact fluorescent lighting lamps, and PCBs, which can be found in many materials, including electronic equipment (switches, voltage regulators and switchboards), fluorescent light ballasts, electrical cables, and oil used in electrical equipment such as transformers. Exposure to third parties of these materials can cause serious health hazards.

Water Intrusion and Mold

Improper installation and sealing of electrical equipment through roofing and interior or exterior walls could create an opening for water intrusion and result in mold growth. During installation or repair work, the piping could also be punctured behind walls and cause a leak that can result in mold growth.

Soil Contamination and Run-off

Disturbance or relocation of soils from excavation or trenching could result in unknown pre-existing contaminated soil being collected and spread to a site’s clean areas or improperly disposed of. Improper stockpiling of soils could also allow run-off of silt and sediment. Exposure to stormwater or a water pipe break could lead to surface run-off of these soil particles, impairing the proper functioning of stormwater drainage systems and causing ecological damage to streams and rivers.

Underground Utility Strikes

Failure to properly locate underground utilities such as gas lines, water, and sewage pipes, or unknown hazards such as septic tanks, could result in striking a line or causing an accidental puncture and release of pollutants like fuel oil, chemicals, toxic gases, or sewage.

Hazardous Waste Disposal

Jobsite waste could contain hazardous materials, including asbestos, lead-based paint, mercury, or PCBs, and require special disposal procedures. Container breaches or improper handling may result in releases between the jobsite and the disposal location during transit. Hazardous waste could be inadvertently mixed with construction debris/waste and then disposed of improperly. Some of these wastes are regulated, such as mercury and PCBs, and improper disposal can result in environmental contamination, tort liability, fines, and penalties.

Plastic Particulates and Fumes

Plastics are present in electrical conduits, fiber optic cables, electronic potting compounds, insulators, circuit boards, transducers, solar collectors, lighting, housings, enclosures, sockets, and switches. Some materials produce small inhalable particulates as wear and tear occurs or can be emitted during a hostile fire. When exposed to humans or environmental organisms, they can act as endocrine disruptors, reproductive toxins, or carcinogens.

Toxic Metal Fumes

During soldering, brazing, and welding work, metal fumes are produced and released into the air, where they can be readily inhaled. Metals can also be present in the flux or pastes used. Metal fumes are often toxic after multiple exposures and have developmental impacts and effects on the kidneys, liver, and nervous system.

Design Professional Liability

Electrical design entails planning, creating, testing, or supervising the development and installation of electrical equipment. Contractors may provide design services that can result in professional liability, including design-build, design-assist, or providing professional opinions on design aspects. Errors and omissions can delay time, overrun budgets, and result in rework.

On-Site Design Modifications

Contractors may make modifications to design specs while at the jobsite. Malfunctions arising from these changes create a direct professional responsibility for the contractor.

Subcontractor Liability

Selection and supervision of subcontractors create professional liability. Contractors may be required to defend against claims relating to work for which they were responsible due to the hiring of the sub.

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

Contracting operations performed at a jobsite

Third-party claims for bodily injury and property damage

Third-party claims for cleanup

First-party emergency response cost

Mold, legionella, bacteria, fungi, lead, asbestos, and more

Sudden and accidental coverage for owned/leased locations

Non-owned disposal site liability

First and third-party transportation pollution liability

Loading and unloading

Professional liability

Mitigation/rectification

Excess/contingent design

Defense of third-party claims

Claims Scenarios & Examples

A convention center was undergoing a renovation and additional construction project. Two years after the project was completed, it was found that some of the equipment installed by the electrical contractor was installed incorrectly, which allowed unconditioned air from the outside to enter the building, even when the unit was off. The ductwork for the exhaust grills was also found to have been installed with gaps to the outside. Both contributed to increased air and water in the interior wall space, which fostered mold growth. Damages exceeded $2 million. The electrical contractor paid more than $60,000 toward remediation and almost $200,000 toward the claim settlement. In addition to these expenses, defense costs were also accrued.

An electrician was hired for a large renovation project, and as part of the job, they removed hundreds of old lighting fixtures, replacing them with new ones. The old fixtures were put into 55-gallon drums and placed with the rest of the construction debris to be disposed of. A year later, the contractor received a letter from the EPA which held him responsible for the hazardous PCBs found in the old light fixtures. The PCBs had leaked from the drums and polluted the sanitary waste landfill. The cleanup costs exceeded $1 million.

While working on a renovation and expansion project for a university’s library, the general contractor (GC) subcontracted the electrical design to an electrical contractor under a design/build contract. After the work was done, the electrical system malfunctioned and caused an economic delay in the project. The GC sued the subcontractor for professional negligence. The subcontractor’s E&O carrier paid $750,000 to settle the claims.

As part of a job at a hospital, an electrical contractor removed ductwork from the HVAC system. Later, it was discovered that the removal process and the dismantled duct work sitting on-site caused a fungus inside the duct to spread throughout the hospital. Patients became infected, some critically. The contractor was held responsible for the spread of fungus and faced bodily injury and property damage claims exceeding $1 million.

An electrical contractor was in the middle of a project and needed a sealed drawing of an electrical panel to meet code requirements. The contractor asked a friend, who was a retired professional engineer, to seal the drawing. After the project was completed, it was found that the electrical panel was incorrect, leading to several power outages. The contractor was held responsible because the engineer did not have professional liability insurance.

An electrical contractor worked on an overhead electrical lines installation project and used a subcontractor to sink the new utility poles. While using a drill to install the poles, the subcontractor hit an underground sewer line with the tool, which damaged the line and released raw sewage to the subsurface. The electrical contractor was responsible for the subcontractor’s actions through contractual liability.

Ten years after disposing of project material at a municipal solid waste landfill, the EPA contacted an electrical contractor as a de minimis potentially responsible party for contamination at the landfill. The contractor was denied coverage under their general liability policy due to the pollution exclusion.

A contractor sawed through the ceiling during an electrical installation project at a historic building, inadvertently disturbing and releasing asbestos-containing insulation material. The contractor was held responsible and had to pay cleanup costs for the asbestos fibers released throughout the building.

After designing and installing an electrical system for a hotel project, the contractor was sued by the project owner, as the electrical system was found to be out of compliance and did not work correctly. The design errors were more than $9 million, and because the contractor didn’t have professional liability insurance, he had to file for bankruptcy protection.

An electrical contractor had an aboveground storage tank on-site for fuel trucks and equipment. One night vandals shot a hole in the tank, and the next morning the contractor found that thousands of gallons of gasoline had been released from the tank. The spill resulted in a government-mandated excavation and disposal of all the soil that had been contaminated.

An electrical control panel had an error and reported a valve as closed when it was open, allowing the release of chlorine gas. After several employees and nearby residents became sick, they noticed the leak. The facility was sued along with the electrical contractor who installed the equipment.

An electrician was hired to upgrade transformers in a manufacturing building. During removal, a pole-mounted PCB transformer that contained oil was unintentionally dropped on the ground, causing a spill of PCB-contaminated oil. Investigations determined that contaminated soils had to be excavated and disposed of. The site owner sued the contractor for the resulting costs.

Contractors

Electrical

Environmental Exposures May Include: