ERP - Environmental Risk Professionals

Water Intrusion & Mold

Improperly designed, installed, or repaired fire sprinkler systems can cause accidental water intrusion and lead to the growth of mold and fungi. During installation or repair, improper fittings, damage to the sprinkler head, or cracks created in the piping can produce leaks. Failure to adhere to appropriate protocols when installing systems in areas exposed to freezing temperatures can also result in cracks or loose joints in piping, leading to leaks.

Corrosion

Corrosion is a common cause of fire sprinkler system malfunction or failure in both wet and dry pipe sprinkler systems. Generalized corrosion can be caused by oxygen in the system, and the presence of bacteria causes Microbiologically Influenced Corrosion (MIC). During installation, repairs, or maintenance, introducing oxygen, microbe, or spore-containing debris into the piping system are possible causes of corrosion. Corrosion can result in leaks, cracks, blockages, and slow water movement in the system. Dry systems may have moisture reintroduced after testing and subsequent draining, which can interact directly with the iron in the pipe and cause corrosion.

Chemicals

Fire suppression systems use extinguishing agents such as carbon dioxide, halon, halon replacements, dry chemicals, wet chemicals, or foams. These systems are often used in areas where water systems would be inappropriate such as computer or electrical rooms, motor control centers, historical archive centers, hooded industrial fryers, high-voltage transformers, nuclear power facilities, and waste storage facilities. Chemicals such as carbon dioxide are used at a toxic and potentially lethal concentration, creating potential tort liability for bodily injury due to a pollutant. Improper design, installation, testing, and maintenance can lead to exposure. Accidents often occur during maintenance or testing of the system, which can result from failure to adhere to safety protocols or inadvertently actuating the system due to inadequate safety procedures, system labeling, or personnel training.

Legionella

Legionella pneumophila bacteria are distributed and amplified in water systems. The growth of bacteria is promoted in certain water conditions, including stagnation. Fire sprinkler systems contain stagnant water, and improper maintenance can increase the risk of the growth of legionella. Dispersal of breathable droplets could occur through faulty plumbing, during cleaning or maintenance of the pumps or system, or the operation of the sprinklers.

Design & Installation

Professional liability exposures for fire sprinkler or suppression systems can come from inadequacy in the initial design of the system, error during fabrication and installation, and the subsequent testing, servicing, inspection, or repair of a system.

Improper System Selection

Liability in the system’s design can include selecting the type of system to install, such as wet, dry, or chemical, and the type of sprinkler. Considerations should include the occupancy and conditions to be covered, including ceiling height and type of construction, intended use of the building, and if there are any special hazards, such as the facility’s use of flammable or combustible liquids. Improper system selection could accelerate a fire, result in increased property damage or fail to extinguish the fire.

System Integrity

Design and installation considerations must ensure the adequacy of the system for the covered hazard and ensure the correct water or chemical supply is available. Additional considerations include sprinkler placement, spacing, and discharge criteria. Fires from an unprotected area could become too large for the system to work once the fire reaches a covered area. Routine maintenance should also address building design, use, or occupancy changes.

Routine Maintenance

Inadequate maintenance or inspection of the system, including mechanical deficiencies, proper function, valve actuation, water flow, sprinkler clearances, and corrosion, could result in the system failing to work as intended.

A Combined Pollution & Professional Liability Policy Can Provide Coverage For

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

Defense of third-party claims

First-party emergency response cost

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

Silt and sedimentation resulting from trenching

Sudden and Accidental coverage for owned/leased locations

First and third-party transportation pollution liability

Non-owned disposal site liability

Loading and unloading

Professional liability

Mitigation/rectification

Excess/contingent design

Claims Scenarios & Examples

After a fire sprinkler contractor worked on a project at a private school to install a fire protection system, the community experienced an unusual cold spell. The cold froze the piping system, causing water damage in the building. Further investigation showed that the piping had not been sloped correctly, allowing standing water to sit in the pipes. Costs to fix the damage exceeded $450,000. However, months later, mold was discovered, which was found to be from the water and piping problem. The costs to remediate the mold were an additional $250,000.

After seven cases of legionellosis were found in a state, an investigation found that all of these people had been to a hotel aquatics facility. The pool area at the hotel was closed, and the water was tested. Leaking sprinkler pipes above the pool were also tested. The aquatics facility’s sprinkler system and pool filtration system were found to have species of Legionella. The hotel, pool maintenance company, and fire suppression contractor were all called into the suit.

After having a sprinkler contractor complete an NFPA-25 inspection on the building, a store was destroyed by a fire. A lawsuit was filed, and the property insurance carrier subrogated against the sprinkler contractor for not informing the store of the areas where sprinklers were not installed. While the inspector noted some design problems with the system, the occupancy of the building had changed, and the system was hydraulically inadequate, but that was missed by the inspector and not noted on the report. The sprinkler contractor’s insurance company denied the claim as the policy had a professional liability exclusion.

After a fire sprinkler contractor installed a fire protection system at an apartment complex, an unusual temperature change resulted in an extreme cold spell, which froze parts of the system in the attic, causing water damage. The contractor faced allegations of more than $4 million in damages. Even with concerns that building management did not turn the water off promptly and that settlement caused the pipes to not drain correctly, arbitration negotiations found the contractor liable. The contractor was held responsible for $1.9 million (plus $110,000 in legal fees) in restoration, mold remediation, and relocation of residents while the work was being completed.

A fire sprinkler contractor installed a fire protection system on a hotel project. Soon after the system was installed, a few leaks were discovered at various locations. Because they were found early on, water damage correction costs were minimal. After a few months, more leaks were found, along with mold growth in the areas. Costs to clean up and for business interruption surpassed $600,000.

A hotel hired a contractor to design and install mechanical, electrical, plumbing (MEP), and fire sprinkler systems. Upon completing the project, the hotel found that the fire suppression system did not comply with the fire code and that the electrical distribution system was not working correctly. The MEP contractor did not have professional liability insurance and could not cover the design errors of $9 million. As a result, the contractor had to obtain bankruptcy protection.

When a grease cooking fire started at an apartment complex, the sprinkler system (which had a 71.2 percent concentration of glycerin antifreeze) was activated. Instead of suppressing the fire, it accelerated and caused an explosion. The explosion resulted in a fatality and other serious injuries. Bodily injury and property damages expenses were in the millions.

After a general contractor and fire sprinkler installer worked on a city building, the design and installation of the automatic fire sprinkler system was found to be faulty and did not protect the fourth floor’s void space above the ceiling, which had combustible roof joists and other materials. The system was also found to not comply with state and national building codes, state law, or the National Fire Protection Association standards. Both parties were sued for $5.2 million.

Within two years of installing a fire-control sprinkler system in an office building, small leaks occurred just above the false ceiling. Although the leaks were small, they caused major damage to computerized transaction data stored on magnetic tapes in several rooms. The plaintiff, a financial services organization, sued the piping system supplier, the engineering firm that designed the system, and the installation contractor to recover the extensive loss costs.

Contractors

Fire Suppression/ Sprinkler

Environmental & Professional Exposures May Include