Buildings built before 1978 may contain lead that was used in both interior paint and exterior paints how does Insurance address this?

Greater Cleveland is alive with new apartment construction! There is building activity from Intro across from the Westside Market to Treo near the Duck Island neighborhood to the Ascent at the Top of the Hill in Cleveland Heights. But there are still great older buildings that can provide opportunities for investors.

Buildings built before 1978 may contain lead that was used in both interior paint and exterior paints. This paint can flake become airborne and be especially harmful to children under six years of age or pregnant persons. Lead can also come from older water pipes. The signs and symptoms of lead poisoning can be reviewed by following this link.

As the owner of an apartment building, you rely on your insurance policy to protect you if you are negligent and someone is injured on your property. A slip and fall in the laundry room, somebody gets a shock by a faulty electrical outlet or possibly a physical attack by an intruder (see our previous blog about property safety) and if it is determined you were negligent your insurance policy is there for you. However, if you own an older building and a tenant becomes sick or worse from lead poisoning don’t expect your insurance policy to protect you.

A sample exclusion from an Ohio regional Insurer that includes copyrighted material from Insurance Service Office follows:

This insurance does not apply to:

“Bodily injury”, “property damage” or “personal and advertising injury” arising out of or resulting, in whole or in part, from:

1. Any inhalation of, ingestion of, or physical exposure to “asbestos”, “lead”, or “silica”;
2. The failure to properly warn, supervise, instruct, or recommend, to others, any action or inaction that should or should not be followed when physical contact is made with “asbestos”, “lead”, or “silica”;
3. The use of “asbestos”, “lead”, or “silica” in the construction, manufacture, installation or servicing of any good, product, or structure;
4. The failure to properly, accurately, or adequately inform others as to the operation of any personal protective equipment, product, or device designed to protect individuals or organizations from exposure to “asbestos”, “lead”, or “silica”;
5. The need to repair, replace, or correct (either through the removal or abatement of “asbestos”, “lead”, or “silica”) any good, product, or structure as a consequence of the use of “asbestos”, “lead”, or “silica” in “your work”;
6. The sale, resale, rebranding, distribution, handling, transportation, storage, or disposal of “asbestos”, “lead”, or “silica”;
7. Any loss, cost, or expense arising out of any request, demand, order, statute, or regulatory requirement that any insured or others test for, monitor, clean up, remove, dispose of, remediate, contain, treat, detoxify, neutralize, abate, or in any way respond to, or assess the effects of, “asbestos”, “lead”, or “silica”; or
8. Any loss, cost, or expense arising out of any claim or “suit” by or on behalf of any governmental authority for damages resulting from testing for, monitoring, cleaning up, removing, disposing of, remediating, abating, containing, treating, detoxifying, neutralizing, or in any way responding to, or assessing the effects of, “asbestos”, “lead”, or “silica”.

This exclusion applies whether the “bodily injury”, “property damage” or “personal and advertising injury” is actual, alleged, threatened, or suspected.

B. For the purposes of this endorsement Paragraph F. Liability And Medical Expenses Definitions is amended by the additions of the following:

1. “Asbestos” means asbestos or asbestos products, asbestos fibers, asbestos contained in any product or material, or a mixture or combination of asbestos and other dust or particles.
2. “Lead” means lead, or compounds or products containing lead in any form, or a mixture or combination of lead and other dust or particles.
3. “Silica” means silicon dioxide (occurring in crystalline, amorphous, and impure forms), silica compounds, or products containing silica in any form, or a mixture or combination, and other dust or particles.

After reviewing this endorsement, you can clearly see that insurance is not going to provide much recourse if somebody in one of your rental units becomes ill from lead exposure. So, if you have invested in one of the great older properties in Greater Cleveland have a contractor who is licensed in lead remediation address the situation. And before you renew your insurance policy contact your Trusted Choice Agents at Richey-Barrett Insurance.