Asbestos Diseases and Insurance
An Underwriters Guide to Recent Legal Developments
January 2016
Table of Contents (hyperlinked)
Report Details………………………………………………………....2
Introduction.................................................................................. 3
Legal Liability............................................................................... 5

Breach of Duty………………………………………………...6

Causation………………………………………………………8
- Mesothelioma
- Asbestos Lung Cancer
- Is the Disease Damage?

Insurance Cover……………………………………………..10
- Employers’ Liability
- Public Liability
- The Operation of Policy Exclusions
- Reinsurance
- Statutory Intervention and the ECHR
- Future Developments - Asbestos Lung Cancer
Annexes…………………………………………………………........22
- Timeline of Key Asbestos Legislative Developments
- Asbestos Claims Statistics
- Other Insurance Classes & Asbestos
Asbestos Diseases and Insurance
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Report Details
Published by:
International Underwriting Association of London Limited
1 Minster Court
Mincing Lane
London EC3R 7AA
United Kingdom
Telephone +44 (0)20 7617 4444
Email: [email protected]
With thanks to the Working Party of the IUA Liability Underwriters’ Group:
Nick Comerford
Peter Furby
Karin Garfjeld Roberts
Miriam Havergal
Christopher Jones
Dervla Lynchehaun
Neville White
XL Catlin
Zurich
IUA
Tokio Marine Kiln Insurance
With legal advice taken from: Keoghs LLP:
David Pugh
Partner
David Pugh has successfully handled cases in the Court of Appeal, House of Lords and Supreme Court and
advised a wide range of clients from major composite insurers to the Ministry of Defence, local authorities, large
multinational corporations and the NHS. He is chair of the disease sector focus group of FOIL, and has served on
the Court of Appeal Users committee. David advised the ABI on the Mesothelioma Payment Scheme and
Mesothelioma Act 2014. He represented the ABI in their Supreme Court intervention in IEG v Zurich. He advised
the successful Defendants in Rothwell (the pleural plaques test case). He also advised insurers on the successful
Supreme Court challenge to the Recovery of Medical Costs for Asbestos Diseases (Wales) Bill.
This paper has been drafted for information purposes only and is strictly non-binding in nature. IUA takes
no responsibility for the accuracy of this information, which does not constitute legal advice. As such, IUA
members and other third parties should take legal advice as they deem appropriate on any of the issues
raised in the paper.
First Published: January 2016
Copyright: International Underwriting Association of London Limited
Reproduction of the information in this publication is permitted provided that this is accompanied by a
statement in the following form: ‘Information taken from the IUA publication, ‘Asbestos Diseases and
Insurance’.
Asbestos Diseases and Insurance
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Introduction
Asbestos is a naturally occurring mineral. It is flexible, has a high tensile strength and is heat and
chemical resistant. It can be sprayed on directly, or incorporated into boards, textiles, string,
cement and paints. It has been used in brake linings, pipe lagging, floor tiles, clothing and even
cigarette filters.
Asbestos was very widely adopted in many industries
including construction, shipbuilding and power
generation. The peak of asbestos importation into the
UK occurred during the 1960’s and 1970’s. This then
declined sharply, chiefly due to increasing concern
about the long term and serious health risks it posed.
The use of asbestos was not finally banned in the UK
until 1999, but occupational exposure became
World Mine Production and Reserves1
Mine Production
(Tonnes)
2013
2014
Reserves
United States
Brazil
China
Kazakhstan
Russia
Other countries
—
—
307,000
291,000
420,000
400,000
242,000
240,000
1,050,000 1,050,000
340
300
Small
11,000
Large
Large
Large
Moderate
World total
2,020,000 1,980,000
Large
increasingly rare after around 1980. Some exposure
continues to this day through inadvertent or careless
disturbance of asbestos products already in place.
(rounded)
However, asbestos mining and use is widespread in a number of jurisdictions outside of the UK.
Types of Asbestos and Related Diseases
There have been three main types of commercially used asbestos. These are known as blue
(crocidolite), brown (amosite) and white (chrysotile). The first two are known as amphibole fibres.
White is a serpentine fibre. Amphibole and serpentine fibres have differing shapes and properties.
These properties mean that specific fibre types are more adept at certain tasks. They also carry
1
Information taken from the US Geological Survey / US Department for the Interior publication,
‘Mineral Commodity Summaries 2015’.
Asbestos Diseases and Insurance
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differing implications for health. Blue asbestos is widely regarded as the most toxic, followed by
brown. White asbestos is regarded as being significantly less toxic than the other two types.
Asbestos has been implicated in five main diseases, all affecting the respiratory system. These are:  Mesothelioma. This is a cancer mainly affecting the pleura2, though it can also occur in the
abdomen. It is aggressive and invariably fatal. It is almost solely attributable to asbestos. It can
be caused by minimal exposure to respirable (breathable) asbestos fibres. This combination of
lethal effect, unique causative association with asbestos and very low dosage causation
means that mesothelioma has
been given special treatment
by the courts and UK
legislatures. Mesothelioma is
by some distance the most
costly result of asbestos for
insurers (See Annex 2 for
further information).
 Lung cancer. Asbestos
significantly increases the risk
of developing lung cancer especially where an individual
has also smoked tobacco.
Attribution of lung cancer to
asbestos is currently thought
to require higher levels of
exposure than is the case for
mesothelioma.
 Asbestosis. This is a fibrosis
or scarring of the lung tissue. It
is a type of pneumoconiosis
(lung disease). Asbestosis restricts the lungs’ elasticity and their capacity to absorb oxygen. It is
caused by high levels of exposure to asbestos. It can cause no symptoms or can be significantly
2
The pleura are membranes which line the outside of the lungs. They help easy movement of the
lungs within the chest cavity.
Asbestos Diseases and Insurance
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disabling - and in extreme cases fatal. Asbestosis is sometimes used wrongly as a generic term
to describe all asbestos related diseases3.
 Diffuse Pleural Thickening (DPT). This is a fibrosing condition (inflammation and thickening of
the walls of the alveoli) in the pleura rather than the lungs themselves. Asbestos fibres irritate
the pleura. This causes an effusion which drains to the bottom of the chest cavity. This in turn
sets up a fibrosing effect in the pleura, causing them to thicken. This can restrict expansion of
the lungs. As with asbestosis, DPT can vary in effect from asymptomatic to significantly
disabling.
 Pleural Plaques. These are the most common condition associated with asbestos exposure.
They are areas of localised fibrosis caused by the direct action of fibres on the pleura. In almost
all cases they cause no symptoms.
All of these conditions have a long latency period between fibre inhalation and the onset of the
symptoms of disease. The latency period for mesothelioma is at least 10 years. The more typical
period between exposure and development of mesothelioma is around 30 to 40 years. There is no
maximum latency period4. Some claims are still being dealt with where the only known exposure
occurred in the 1940s. This means that the insurance policies which respond to current claims
were largely written long before the nature and scale of the potential liability was appreciated. This
has led to specific difficulties of interpretation and construction of policies which are often inapt to
deal with asbestos disease.
In the UK, most claims for asbestos disease are made against former employers5. This note
concentrates on Employers’ Liability (EL) cover for that reason. Where Public Liability (PL) cover
differs it is addressed separately.
Legal Liability
Compensation for asbestos diseases is shaped by three main drivers: -
3
For related comments on this point see below on exclusion clauses.
4
In the benign conditions the long latency period can be exacerbated by difficulties of detection for
conditions causing minimal symptoms. Plaques, DPT and asbestosis are often chanced upon by
clinicians investigating other conditions.
5
Unlike in the U.S. where the great majority of claims are product liability based.
Asbestos Diseases and Insurance
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 The size of the current and future financial cost - to individuals, insurers, business and the
State. This encourages frequent legal challenge and dispute.
 Aspects of asbestos diseases which make them difficult to fit comfortably within traditional
legal concepts. These drive the courts to adopt and sustain novel approaches.
 The devastating personal effect of mesothelioma in particular. This leads to heavy political
pressure to intervene.
These three factors have driven rapid change through case law, legislation and claims process.
They are frequently in tension with one another, which leads to uncertainty of outcome. Any
assessment of current asbestos compensation and likely future changes must have regard to the
interplay of these factors. Annex 1 contains more detailed references to important legislative
developments in this field.
To recover damages a Claimant must prove that a duty of care has been breached, that the
breach has caused the disease, and also that the disease is damage for which compensation
should be paid.
Breach of Duty
Asbestos has been known to cause disease for many years. The dangers
of asbestosis from high levels of exposure began to be suspected around
the turn of the 20th century. Regulations governing asbestos exposure
and workers’ compensation for asbestosis were introduced in the 1930’s.
It was originally believed that the dangers were confined to those working
in the asbestos processing industry itself.
The risk of cancer, and the fact that this came from much lower levels of
exposure, became widely known following publicisation of a study into
mesothelioma in 19656. This date serves, broadly, as a threshold. Before this, employers will
only be in breach of duty in negligence if the levels of asbestos were high enough to create a
6
Mesothelioma of the Pleura and the Peritoneum Following Exposure to Asbestos in the London
Area, M Newhouse, H Thompson Br J Ind Med 1965 22.
Asbestos Diseases and Insurance
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risk of asbestosis. After this date, even very low levels of exposure would be regarded as
carrying a foreseeable risk of fatal injury7.
This watershed is subject to important qualifications. Before 1965, employers - and in some
cases, occupiers - may be liable for breach of statutory duty even if the exposure would not lead
to a foreseeable risk of harm. The Supreme Court has held in McDonald v National Grid8 that the
1931 Asbestos Industry Regulations apply to all industries - not just those directly concerned with
the processing of asbestos materials. These regulations impose a strict duty to provide ventilation
where specified activities are carried out with asbestos, including where asbestos is being
‘mixed’. This is a very common activity in workplaces remote from the asbestos industry itself. If
the specified activities are carried out without ventilation, there is a breach of duty to everyone
working in the factory. This includes those working for other parties. This case means that in
many circumstances liability will attach pre-1965 for very light exposure. In the McDonald case
itself the Claimant was a delivery driver who made occasional visits to a power station where
asbestos was often mixed.
The difficulty this ruling causes for Defendants is compounded since the burden is on them to
prove that ventilation was provided. This highlights another broader problem for Defendants and
their insurers - the passage of time since exposure leads to particular difficulties in finding
evidence. In many cases the Defendant company9 no longer exists. In most claims the sufferer’s
evidence of his asbestos exposure is unchallenged. It can often be unchallengeable where the
claim is brought post death or where the sufferer is already too ill to give evidence. Insurers are
often cautious about engaging the sympathies of the Court by pressing a dying Claimant to give
live evidence.
Where the Defendant can assemble evidence it remains possible to successfully argue that steps
were taken consistent with contemporaneous knowledge of the risks. This is often assessed by
7
The archetypal claims where liability is unlikely to attach pre-1965 are the so called ‘shake down’
cases - where exposure comes from family members’ contact with those working with asbestos.
See Maguire v Harland and Wolff 2005 EWCA Civ 1.
8
2014 UKSC 53.
9
Dissolved companies can be restored to the Companies Register for the purpose of bringing claims
against insurers.
Asbestos Diseases and Insurance
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reference to guidance given to the Factories Inspectorate - most notably TDN 1310. These remain
unusual cases.
Causation
Mesothelioma
Once breach of duty is established a Claimant has to prove that this
caused his loss. In most personal injury cases this means he has to pass
the ‘but for’ test. This is a particularly difficult question to answer with
mesothelioma. As we have seen, this can be caused by very low levels of
exposure to asbestos. Many Claimants have been exposed to asbestos
The ‘but for’ test of
causation
That ‘but for’ the
Defendant’s breaches of
duty, would the Claimant
have suffered his disease?
by a number of employers. There is also a certain level of background
exposure to asbestos in urban areas. How can a Claimant prove that
‘but for’ a particular employer’s breaches they would not have suffered from
mesothelioma? The answer is that he cannot, if the normal rules of causation are followed.
This is the puzzle which faced the House of Lords in Fairchild v Glenhaven11. The deceased in
this case had been exposed to asbestos by more than one employer. The EL insurers involved
argued that the Claimant could not prove which employer’s breach had caused the disease. That
meant the claim must fail. The House of Lords refused to accept that result. They made a policy
decision to apply a new test - on the openly expressed basis that they would rather do an
injustice to wrongdoing employers than to mesothelioma sufferers. Instead of the ‘but for’ test, the
Lords decided that all that the Claimant had to prove was that his asbestos exposure caused by
any wrongdoer had materially contributed to the risk of disease.
Fairchild is a pivotal decision and crucial to an understanding of the history and future of asbestos
compensation. It constitutes a major departure from the normal rule of law. It has had many legal
repercussions.
The ruling itself and its reverberations are the strongest example of the interplay between the
three drivers of compensation set out above. The first Court interpretation of Fairchild was in a
10
11
Technical Data Note 13, issued in March 1970.
2002 UKHL 22.
Asbestos Diseases and Insurance
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case called Barker v Corus12. The Defendants here argued that if their liability was for creating
the risk of disease, that liability should be divided to match their individual contribution to that risk.
The House of Lords agreed with that approach.
The historical nature of asbestos claims often means that employers no longer exist and
insurance cannot be found. The Barker judgment meant that many Claimants would not receive
full damages. Political pressure meant that the decision was overturned within weeks by
Parliament under the Compensation Act 2006. Since this Act, each wrongdoer is liable for all of a
mesothelioma Claimant’s loss even if they were only responsible for a small part of the total
asbestos exposure.
The Compensation Act still permits wrongdoers to seek contribution from others. Insurers can
subrogate on such claims when they have indemnified policyholders. If there is a missing period
of employment, liable parties have to share the additional costs between themselves. The effect
of Fairchild and Barker on legal rights between insurers and policyholders is discussed below.
Asbestos Lung Cancer
Asbestos is known to play a role in the development of lung cancer. The Health and Safety
Executive (HSE) believes that there are as many asbestos related lung cancers as there are
mesotheliomas13. Insurers currently receive far fewer claims for asbestos lung cancer. It is likely
that this is due in part to uncertainties about the appropriate approach to causation.
It is currently accepted that asbestos exposure has to be enough to double the risk of cancer
before it can be attributed to asbestos. Unlike mesothelioma there is no uniquely strong
association between asbestos and lung cancer. The obvious additional factor is tobacco, but
there are others.
At the time of this report’s preparation there is no binding legal authority telling the Courts how to
deal with asbestos lung cancer causation. That is due to change with a case called Heneghan.
This will be heard in the Court of Appeal in January 2016. The potential outcomes on causation
12
2006 UKHL 20.
13
See HERE for further information.
Asbestos Diseases and Insurance
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carry distinct implications for how cover responds, as well as for primary liability. This is dealt with
in further detail below.
Is the Disease Damage?
The most common form of asbestos disease is pleural plaques. In 2008, the Industrial Disease
Advisory Council supported an estimate of between 36,000 and 90,000 UK cases per year14.
As noted, plaques generally cause no symptoms. They do not develop into any of the more
serious conditions, nor do they increase the risk of those more serious conditions. Damages are
awarded for loss, not for mere physical change. Insurers paid plaques claims for many years after
early decisions supported the award of damages. Rising numbers of claims and associated costs
led insurers to challenge those early cases. The challenge succeeded in 2007 in Rothwell15.
Since this case damages have not been available in England and Wales for plaques - or for
asymptomatic asbestosis/diffuse pleural thickening16.
The devolved legislatures in Scotland and Northern Ireland reversed Rothwell by statute17.
Asymptomatic asbestos diseases continue to attract compensation in those jurisdictions. The
Scottish legislation was unsuccessfully challenged by insurers using the European Convention on
Human Rights (see below).
Insurance Cover
Employers’ Liability Insurance
The great majority of claims for asbestos disease in the UK are made against employers. It has
been compulsory since 1972 for most employers18 to carry insurance for injury and disease
sustained by employees.
14
See IIAC Position Paper 23 HERE.
15
Rothwell v Chemical & Insulating Company 2007 UKHL 39.
16
One of the Claimants in Rothwell was diagnosed with diffuse pleural thickening during the course
of the litigation. This did not cause symptoms. The Court of Appeal rejected the Claimant’s attempt
to drop out of the litigation, ruling that his case was the same as the plaques Claimants.
17
Damages (Asbestos Related Conditions) Scotland Act 2009.
Damages (Asbestos Related Conditions) (Northern Ireland) Act 2011.
18
The main exceptions being State employers.
Asbestos Diseases and Insurance
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The Courts have had to decide when a policy triggers for mesothelioma following Fairchild and
how liabilities are divided between insurers and policyholders. In Durham19, some insurers
argued that their EL policies did not trigger at all. They said that their policies were worded to
cover injuries ‘sustained’ or ‘contracted’ during the period of cover. In the case of mesothelioma,
they said, no injury was sustained during the policy period. The injury did not occur until the
disease became onset many decades later.
The majority20 of the Supreme Court disagreed. They ruled that a proper interpretation of the
policies should take account of their general nature and purpose - which was to afford complete
indemnity by reference to activities and employees within the policy period. Once that was done,
it was right to interpret them as operating on an injury caused basis.
The Supreme Court has ruled more recently on liabilities as between policyholders and insurers.
In IEG v Zurich21 the mesothelioma sufferer had been exposed to asbestos for 27 years during
his employment with IEG. For 6 of those years IEG had EL cover with Zurich. IEG claimed a full
indemnity from Zurich. They argued that Fairchild triggered liability during the policy period. The
Compensation Act 200622 meant that this had to be for the full amount.
Zurich agreed that their policy was triggered and that if the Compensation Act applied, their
indemnity was for the full amount. They argued that this was a manifestly unfair outcome of the
way that the law had developed many years after the policy was written. They asked the Court to
create an equitable right of recoupment, permitting insurers to secure an appropriate contribution
from policyholders (and their insurers).
By a bare majority the Supreme Court agreed to create the recoupment right. They
acknowledged openly the problems which had been caused by Fairchild and the need for the
Courts to acknowledge those difficulties and arrive at a fair distribution of losses between
19
Durham v BAI and Others 2012 UKSC 14.
20
The sole dissenting judgment illustrates the complexities of applying Fairchild principles. Lord
Phillips, the most senior Justice, found that EL cover did not trigger at all for mesothelioma as
Fairchild liability was for risk and not injury.
21
International Energy Group v Zurich 2015 UKSC 33.
22
An added complication to IEG is that it originated in Guernsey. The 2006 Compensation Act does not
apply to Guernsey. IEG argued that the Court should regard Guernsey law as inevitably reflecting
the Act. This was rejected but at least meant that the effect of the 2006 Act was fully argued.
Asbestos Diseases and Insurance
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wrongdoers and their insurers. The Court drew parallels with double insurance but also found that
the normal 50/50 presumption need not apply. Liability could be apportioned in accordance with
the years of exposure and of cover.
The minority also found for Zurich but did so by stressing the paramount importance of liability
being delineated and defined by the policy period23. Although this would have led to the same
result in IEG itself, it would carry significant implications for Claimants. In many mesothelioma
cases, there is missing cover. This might be because cover was not bought, especially before this
became compulsory in 1972. It might be that insurance records have been lost. Had the
minority’s view been followed, those claiming against insolvent companies would have faced a
damages shortfall - an outcome that may well have led to statutory intervention.
The approach taken by Zurich and agreed by the Court preserves full compensation for
mesothelioma claimants. The right of recoupment against the policyholder follows a full indemnity
from the insurer for the entire loss. The Court was careful to stress that this mechanism was
solely necessitated by the Fairchild exception. Where liability is established by conventional
means there will be no such right. This carries further implications for asbestos lung cancer which
are discussed below.
Some of the auxiliary findings in IEG are also of some significance. The Supreme Court
confirmed that coinsurers of the same policyholder have a right of contribution between
themselves24. The Court also found that Fairchild causation meant that the disease was
repeatedly ‘caused’ during each period of cover. This clarifies the means and mechanisms by
which primary loss insurers claim from reinsurers. Since the loss is caused repeatedly in each
cover period this supports proportionate allocation to each annual policy and corresponding
reinsurance treaty25.
Public Liability Insurance
Although most claims for asbestos diseases are answered by EL cover there remain situations
where PL cover can be involved, either as a front line response or where other compensators
23
See the parallels here with the reasoning in Durham.
24
The right of contribution between insurers of co-defendants is covered by subrogation.
25
The same logic applies to excesses and retentions but these are unusual in EL policies, and
supporting documentation to this effect is rarely available.
Asbestos Diseases and Insurance
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seek a contribution. Liability imposed by statute often covers both employers and occupiers. That
is the case with the 1931 Regulations and the 1937 Factories Act found to impose the liability in
Macdonald (see above). There will also be situations where the common law would be likely to
find a liability.
Most public liability insurance has been written using wording requiring that injury has been
“sustained” during the policy period26. The precursor to the Durham case on EL policies was a PL
claim - Bolton v MMI27. The Court decided that the ‘sustained’ wording meant that the policy
which answered was not the one in place when asbestos was inhaled, but the one which applied
when the sufferer became injured.
The facts of Bolton itself meant that the Court did not specifically find when the particular injury
occurred. The balance of the evidence suggested that in malignant conditions this would have
been regarded as taking place 10 years before onset of symptoms. This was the point at which
cell mutation and division had escaped the body’s own control mechanisms. The underlying
evidence about tumour development was later re-examined in Durham. The emphasis here was
on angiogenesis - the point at which a tumour establishes its own blood supply. This was said to
occur around 5 years before symptoms. PL cover written on an ‘injury sustained’ basis is now
commonly regarded as having its trigger at this point - though there is no market consensus on
this28.
This carries significant implications for insurers. The more recent the trigger event, the more likely
it is that the covering policy will include an effective asbestos liability exclusion clause. As PL
cover is non-compulsory, properly worded exclusion clauses are effective. That would not be the
case with post 1972 EL cover29.
The current status of Bolton remains unclear. The issue of PL trigger has not been re-examined
following the Supreme Court’s decision in Durham. The outcome of any such challenge is
26
This was not universal. The cover which responded in McDonald used “injury caused” wording.
27
2006 EWCA Civ 50.
28
There must also be an argument that, following Rothwell, injury is not sustained until symptoms are
manifest.
29
See Policy Exclusions section.
Asbestos Diseases and Insurance
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uncertain given Durham’s shift away from policy wording and towards the broad context of the
policies. This is made more difficult with PL cover by the fact that this is a non-compulsory class
of insurance without statutory policy as a guide. The current status of PL trigger must be regarded
as susceptible to further interpretation. The potential for a legal challenge to current practice
depends on the underlying financial implications. As few claims are currently answered by PL
insurance there appears to be limited impetus for such a challenge. If there is an increase in PL
claims (including contribution claims) the likelihood of such a challenge increases.
The Operation of Policy Exclusions
Exclusion clauses for asbestos diseases are rarely encountered in current claims30, but do exist.
As with all exclusion clauses the wording must be tightly
drawn to be effective. In Turner & Newall v RSA and
others31, insurers relied on a clause excluding liability
TYPICAL ASBESTOS EXCLUSION CLAUSES
for pneumoconiosis to argue that liability for all asbestos
diseases was excluded. The Court rejected that, saying
that the clause had to be construed in its narrowest
sense. The only asbestos disease which was a
pneumoconiosis was asbestosis. This was effectively
excluded. The other diseases were not.
This case considerably predates the Durham decision. It
“This Section shall not apply to liability or
indemnity:
arising out of or related in any way to asbestos
fibres or particles or any derivatives of asbestos
or any materials containing such in any form
whatsoever.”
“This Policy does not apply to or include
indemnity:
may be that it would be decided differently once regard
is had to the broader circumstances and purpose of the
policy concerned. There is ample reason to believe that
Turner & Newall, a primary importer and processor of
asbestos materials, wished to ensure that it dealt with all
claims for asbestos disease.
For EL policies which post-date 1972 there can be no
legal EL exclusions for any injury types or causes32.
Asbestos
arising out of the manufacture, mining,
processing, distribution, testing, remediation,
removal, storage, disposal, sale, use of or
exposure to asbestos or materials or products
containing asbestos whether or not there is
another cause of loss which may have
contributed concurrently or in any sequence to a
loss or in respect of that part of any property
insured by this Policy which consists of
asbestos.”
30
Not least because the documentation can be difficult to trace.
31
2003 EWHC 1016.
32
Again formally confirmed in Turner & Newall v RSA and others, op cit. (as cited above).
Asbestos Diseases and Insurance
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On the PL side, in a variation from the total asbestos exclusion clause, some insurers are
prepared to limit the extent of the exclusion to include liability arising from the accidental
discovery of asbestos. This would generally operate only in respect of claims first made against
the insured and notified to the insurer during the period of insurance. The write back would
normally specifically exclude liability relating to any subsequent activity following the discovery,
for example arising from a specialist sub-contractor appointed to remove the asbestos. It would
also normally exclude liability if the insured knew of the existence of asbestos and would also
normally be subject to a specific policy sub-limit. There may also be an exclusion relating to the
damage to or loss of use of property or diminution in value of property due to the presence of
asbestos.
In addition to the exclusionary language, policies may also specifically refer to excluding liability
for mental injury or fear of suffering bodily injury death disease or illness arising out of actual or
suspected exposure to asbestos or asbestos containing materials.
Finally, we are aware of some PL policies providing for a claims
made aggregated / cost inclusive extension.
ACOD/B
There are two key principles
arising from the ACOD/B
clause:
Reinsurance
It is worth briefly highlighting the approach of reinsurers to asbestos
exposures. This part relates primarily to treaty reinsurance and not
specifically to facultative reinsurance risks or excess of loss policies.
Though it is difficult to make generalisations on the response of the
reinsurance market as a whole to asbestos, as with any insurance
cover, treaty reinsurers have by and large sought to understand and
manage their exposure to asbestos claims. This has been done in a
number of ways. Firstly, cover for specific asbestos exposures such
as accidental damage or clean up of buildings containing asbestos
(post-1999) may be available on a case by case basis. Secondly, use
of deductibles may act to limit individual employee occupational
1. that the clause restricts
cover for non-sudden and
accidental occurrences
and emphasises that one
claimant equals one
event;
2. that reinsurers’ liability
shall be pro-rata of the
proportion of the
reinsurance period to
the total period of
exposure to the hazard.
Though drafted prior to the
Supreme Court decision in
IEG-v-Zurich it is consistent
with the decision.
disease exposures to the reinsurer. Finally, many treaty reinsurers
Asbestos Diseases and Insurance
Page 15 of 27
apply Accident Circle Occupational Disease (ACOD) clauses – normally ACOD/B. Originally published in
1984 and updated periodically since (most recently 2013)33 the ACOD clauses outline the excess of loss
reinsurance treaty policy response to occupational disease claims arising from EL and workers
compensation (WC) policies.
Statutory Intervention and the European Convention on Human Rights
The UK Parliament and devolved legislatures have intervened repeatedly in asbestos disease
compensation. It is possible to discern two significant motives for intervention. The first is
purportedly to protect the interests of asbestos Claimants. There is a well organised and strident
lobby of Asbestos Victims Support Groups (AVSG). Trade Unions are also vocal in their support
of asbestos claimants, as are Claimant lawyers34. MPs of all parties have unsurprisingly
appeared sympathetic to their collective influence. The second motivation is the perennial interest
of Government in shifting liabilities from the public purse to the private sector.
These two dynamics often coincide to impose additional liabilities on existing policies of insurance
and insurers as a group, sometimes done through unusual methods. The AVSG, for example,
formally intervened in the Supreme Court in IEG in favour of the employer who caused the
disease and opposing Zurich’s mechanism intended to guarantee full compensation.
The Compensation Act 2006 is the most significant example of statutory intervention. It is an
equally good example of how the political imperative can lead to paradoxical drivers and
outcomes. The Barker challenge (see above) was not mounted by the insurance industry, but by
an uninsured employer and a Government department. The Government’s argument having
succeeded, they then succumbed to political pressure and immediately overturned the result by
statute35.
Legislation has increased the number of cases where insurers pay damages, such as with pleural
plaques. More often, it has added to the amount paid by insurers on those cases they were
33
Details of the ACOD clauses and how they are designed to work can be accessed HERE (search
‘ACOD’ for both the clause and Explanatory Memorandum).
34
As an illustration of the issues and the position adopted by such groups, see the British Asbestos
Newsletter HERE.
35
The insurance industry has frequently been criticised for mounting the Barker challenge, which
insurers actually had nothing to do with.
Asbestos Diseases and Insurance
Page 16 of 27
already paying. In most cases, this imposes additional liabilities on existing historic policies. This
might be through additional damages as with the Compensation Act. It might be through repaying
state benefits to Government. It has also included preserving additional expense by making
mesothelioma claims immune from recent changes designed to control legal costs36.
Governments have also gone directly to insurers to impose an additional liability. Following the
Mesothelioma Act 2014 all active insurers37 must pay into a scheme established to provide
compensation to mesothelioma victims who cannot trace solvent employers or insurers. The
scheme satisfies both of the drivers for legislative intervention since it also repays State benefits
to the Government - money which would otherwise be lost to the State.
The scheme established by the Act is funded entirely by the levy on insurers. Each insurer’s
contribution is assessed by their individual market share of gross written premium. The scheme
also repays the state benefits for each Claimant. This makes it a suitable solution for
Government. The scheme pays compensation to those who would otherwise receive nothing. It
also funds the State.
The mesothelioma scheme was established in response to a consultation into an Employers’
Liability Insurance Bureau - an ‘ELIB’ fund of last resort to mirror the Motor Insurers’ Bureau
(MIB) in motor claims. The apparent success of the mesothelioma scheme may tempt future
Governments to take similar steps in relation to other latent diseases, which would be dominated
by other asbestos related conditions. The most obvious candidate for this would be asbestos lung
cancer. Insurers decided to engage with Government to help establish the mesothelioma
scheme. Proposals for a wider fund would be likely to encounter greater resistance - especially
perhaps from current EL insurers with no legacy book.
Neither the UK Government nor the devolved legislatures has unfettered power to pass
legislation as they choose. Both are subject to the European Convention on Human Rights38.
36
Section 48 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 suspends the
reforms for mesothelioma claims alone - permitting lawyers to continue to recover profit cost uplifts
from Defendants.
37
I.e. those authorised under compulsory EL insurance legislation.
38
The devolved legislatures are all directly bound. They cannot pass legislation which breaches the
ECHR. Parliament theoretically retains complete sovereignty but the UK has international treaty
obligations to comply with ECHR decisions.
Asbestos Diseases and Insurance
Page 17 of 27
Protocol 1 Article 1 of the ECHR (A1P1) provides that every person39 is entitled to the peaceful
enjoyment of their possessions. This, though, is a qualified right. This means that Governments
can interfere with possessions if they are pursuing a legitimate aim and if they do so
proportionately.
One general principle of proportionality is that States should not normally interfere with the effect
of existing contracts. This makes it more difficult for Government to pass legislation affecting
insurers’ liabilities from policies written many decades ago. Two attempts have been made by
insurers to use A1P1 to challenge legislation. Both concerned devolved legislatures. Taken
together they offer some level of guidance about whether future statutes would be lawful.
In AXA and others v Lord Advocate40 insurers tried to block the Scottish legislation restoring
compensation for those with pleural plaques. The Supreme Court agreed that insurers’ reserves
were possessions to be protected under ECHR. They also agreed that insurers had standing to
bring the case. They disagreed that the legislation was disproportionate. They said that it
addressed a reasonable perceived social purpose, with compensation going to those who had
experienced a diagnosable physiological response to asbestos. Crucially, it could not be said that
such an outcome was inconceivable at the time the policies were entered into.
Insurers later used A1P1 successfully to challenge the lawfulness of a Bill passed by the Welsh
Assembly. This Bill sought to recover the cost of NHS treatment for asbestos diseases from
compensators, including insurers.41 The cost of NHS treatment is routinely recovered from
insurers following accident claims in the UK, but this was introduced in a way which allowed
insurers to anticipate the change and adjust premiums.
The Supreme Court upheld the insurers’ challenge.42 The addition of a liability for NHS cost was
an entirely new head of claim owed to a third party. It could not reasonably have been anticipated
39
This includes a ‘legal person’ such as an insurance company.
40
2011 UKSC 46.
41
Recovery of Medical Costs for Asbestos Diseases (Wales) Bill.
42
2014 UKSC 43.
Asbestos Diseases and Insurance
Page 18 of 27
at the time the policies were written. It did not help sufferers as the money recovered would
simply go to the State.
Taking both cases together shows that the more easily an additional liability could have been
foreseen at the time of agreeing the policy, the more likely it is that it would be A1P1 lawful. If a
provision benefits disease sufferers it is more likely to be lawful than if it just benefits
Government.
Future Developments - Asbestos Lung Cancer
The current crucial issue is the question of asbestos lung cancer causation. This is at the core of
Heneghan v Manchester Dry Docks43 noted above. This case will be heard in the Court of Appeal
in January 2016 and will likely to proceed to the Supreme Court in due course.
Despite the views of the HSE about asbestos lung cancer prevalence, insurers currently receive
far fewer claims compared to mesothelioma (see Annex 2). This is probably due to a number of
factors. It is likely that one of the most important has been the uncertainty over causation. Until
recently neither Claimants nor Defendants have sought to test the waters.
Insurers have held concerns over the potential introduction of Fairchild causation for lung cancer.
Lung cancer incidence greatly outnumbers that of mesothelioma44. The very low threshold of
exposure needed for Fairchild causation - the material contribution to risk - would mean that
many of those lung cancer sufferers would establish liability under ‘pure’ Fairchild. Conversely,
Claimants have been concerned that under the normal legal principles applying to multiple factor
cases45 claims would fail altogether.
The precise basis by which the Heneghan case is argued carries significant implications for both
primary liability and insurance cover. To find out why, it is necessary to look at those arguments
in detail. The employer responsible for most of the asbestos exposure in Heneghan no longer
43
First Instance Decision 2014 EWHC 4190 QBD.
44
Around 43,500 cases per annum compared to around 2,200 for mesothelioma.
45
See the clinical negligence claim of Wilsher v Essex Area Health Authority HL 1988 1 AC 1074.
See also the Australian asbestos lung cancer case, Amaca Pty v Ellis [2010] HCA 5.
Asbestos Diseases and Insurance
Page 19 of 27
exists. The claim is being pursued against other former employers - each of whom were only
responsible for a small proportion of the asbestos exposure.
The Claimant contends that knowledge of cancer has evolved since Fairchild. She argues that it
is now possible to establish that all exposure to a carcinogen leads directly to disease causation.
This would mean that causation would be established using the traditional ‘but for’ test. As lung
cancer is an ‘indivisible’ condition46 this would make any wrongdoer liable for the whole loss regardless of other exposures.
The Defendants deny that the evidence supports the Claimant’s case. They say that to succeed
against any of the ‘minority’ employers, the Claimant must use Fairchild47. If she does so, she
must also accept Barker48 and only recover a proportion of her damages. This leads to the
paradoxical situation where Defendants argue for an extension of Fairchild, and the Claimants
argue against it. It is crucial to understand that the Defendant’s position is that Fairchild only
applies to the second stage of a two stage causation test - i.e. to the question of who caused the
disease but not to question of what caused the disease.
The Defendants’ argument succeeded at first instance.
Both sides say that there are two stages in determining causation. The Claimant agrees that she
must prove disease causation (i.e. what caused the disease) by establishing doubling of the risk.
If an individual’s asbestos exposure was enough to double the risk of him developing cancer, he
succeeds in proving that it was an asbestos lung cancer. This is a much higher threshold than the
pure Fairchild test feared by insurers.
If the Claimant’s argument succeeds, asbestos lung cancer cases would be easier to bring. They
would also be significantly more expensive to settle. This argument would also circumvent the
decision in IEG v Zurich. In most important respects in relation to causation, lung cancer and
mesothelioma are the same49. The Claimants do not need their Heneghan argument in claims for
46
I.e. once you have it, you have it. No additional breach or exposure makes any difference.
47
The Defendants did not follow the arguably more logical line that the Claimant could not recover at
all for fear of further statutory intervention.
48
The Compensation Act 2006 only applies to mesothelioma.
49
The first instance judgement in Heneghan says so, in terms.
Asbestos Diseases and Insurance
Page 20 of 27
mesothelioma because of Fairchild. A policyholder with only partial cover would be more
interested. They could argue that exposure during the policy period had directly caused the
disease - either mesothelioma or lung cancer. This would lead to full indemnity. The IEG
recoupment right would not apply since this is predicated purely on Fairchild causation.
A Claimant success would also increase the likelihood of successful claims for other cancers. The
same argument was attempted by Claimants in a non asbestos cancer case involving the
Phurnacite works in South Wales50. The exposure here was to by products51 from the
manufacture of coke briquettes52. Diesel fumes, silica and various metals have also been
associated with lung cancer.
Whichever argument succeeds in Heneghan, there would remain the question of policy trigger.
As matters stand with mesothelioma, any exposure above normal background levels is sufficient
to increase the risk and so ‘prove’ disease causation under Fairchild principles53. This closely ties
exposure to causation and means that any exposure during the cover period will be enough to be
regarded as having caused the disease.
If there is a threshold of doubling of the risk to be surmounted before a lung cancer can be
ascribed to asbestos, it may follow that for an “injury caused” policy to trigger, exposure must be
enough to double the risk during the policy period - arguably during each separate policy period.
Finally, although the current Claimants in Heneghan agree that they must ‘double the risk’ to
prove that the cancer is related to asbestos, that does not bind any future Claimants. Once the
principle of Fairchild application to lung cancer is accepted it would appear to be an easier task to
apply the same test to both ‘stages’. The number of potential claims this would unlock would
make it a very attractive outcome for the increasingly commercial Claimant lawyers.
50
Jones and Ors v Secretary of State for Energy and Climate Change 2012 EWHC 2936.
51
Specifically, polycyclic aromatic hydrocarbons.
52
It is understood by the author that the question of lung cancer causation is also due to be reviewed
in further litigation involving coke workers.
53
See Sienkiewicz v Greif Ltd 2011 UKSC 10.
Asbestos Diseases and Insurance
Page 21 of 27
Annex 1 - Timeline of Key Asbestos Related Legislative Developments
Year
Instrument (hyperlinked)
Description
1931
Asbestos Industry Regulations
Into force in 1932 - first recognised legislation controlling asbestos
use in factories
1937
Factories Act
Builds on the 1931 Regulations
1969
Asbestos Regulations
First quantitative limit for asbestos dust exposure
1972
Employers' Liability (Compulsory
Insurance) Act
The 1969 EL Act comes into force - requires employers to insure
against their liability for personal injury to their employees
1974
Health & Safety at Work Act
Greater health and safety responsibilities placed upon employers
1979
Lump sum payments pneumoconiosis, byssinosis or diffuse
Pneumoconiosis etc. (Workers’ Comp)
mesothelioma sufferers. The lump sum amounts have been
Act
periodically increased by legislation.
1983
Asbestos (Licensing) Regulations
Strict guidance on the removal of asbestos
1985
Asbestos (Prohibitions) Regulations
Ban on Crocidolite (Blue asbestos) and Amosite (Brown asbestos)
1987
Control of
Regulations
1990
Control of Asbestos
Regulations
1992
Asbestos (Prohibitions) Regulations
Ban on rarer forms of Amphibole asbestos (Tremolite, Actinolite
and Anthophylite)
1999
Asbestos (Prohibitions) Regulations
Includes ban on Chrysotile
2002
Control of
Regulations
2006
Compensation Act
‘Responsible Person’ liable for all of the damage caused by
mesothelioma, even if another party could also have caused it
2006
Control of Asbestos Regulations
Amalgamation of previous asbestos legislation
2008
Mesothelioma Lump Sum Payments
(Conditions and Amounts)
Regulations 2008
Lump sum payments for mesothelioma sufferers or their
dependents
2009
Damages (Asbestos-related
conditions) (Scotland) Act
Plural plaques become actionable in Scotland
2011
Damages (Asbestos-related
conditions) Act (Northern Ireland)
Asbestos related plural plaques become actionable in Northern
Ireland
2012
Control of Asbestos Regulations
Introduces a new category of asbestos removal work and a new
types of survey
2014
Mesothelioma Act
Creates the statutory means to introduce the mesothelioma levy
on UK EL insurers. The Diffuse Mesothelioma Payment Scheme
Regulations 2014 establishes the detail of how the Scheme works
2015
The
Mesothelioma
Lump
Sum Revised lump sum payments to mesothelioma sufferers (updating
Payments (Conditions and Amounts) the 2008 Regulations)
(Amendment) Regulations 2015
Asbestos
at
in
Asbestos
Work Introduced to protect workers from fibre exposure when working
with asbestos containing materials
the
at
Air Prevention and reduction of environmental pollution by asbestos
Work Businesses are obliged to identify and manage asbestos in their
properties (regulation 4)
Asbestos Diseases and Insurance
Page 22 of 27
Annex 2 - Asbestos Claims Statistics
Taken from the Institute of Actuaries UK asbestos working party YE2014 survey
NUMBER OF CLAIMS NOTIFIED BY NOTIFICATION YEAR (100% of market)* - includes nils
Pleural Plaques
Notification
Asbestos Related
Pleural
(Scottish & NI
Asbestosis
Mesothelioma
Year
Lung Cancer
Thickening
exposure only)
1995
49
1,445
112
5
811
1996
42
1,472
172
26
1,017
1997
60
1,454
148
24
1,099
1998
129
1,441
106
56
1,303
1999
106
1,652
100
75
1,504
2000
187
1,856
108
145
1,735
2001
197
1,875
123
256
1,749
2002
229
1,745
145
243
1,656
2003
253
1,994
177
466
1,868
2004
371
1,637
193
592
1,918
2005
329
1,526
247
837
1,995
2006
131
1,447
345
952
2,568
2007
57
1,358
344
659
2,696
2008
53
1,371
384
756
3,152
2009
214
1,295
379
778
3,154
2010
173
1,496
457
785
3,256
2011
216
1,487
536
824
3,402
2012
533
1,455
578
964
3,472
2013
469
1,577
488
910
3,506
2014
493
1,624
484
756
3,538
AVERAGE INCURRED CLAIM COST BY NOTIFICATION YEAR - includes nils
Notification
Year
Pleural Plaques
(Scottish & NI
exposure only)
Asbestosis
Asbestos
Related Lung
Cancer
Pleural
Thickening
Mesothelioma
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
11,592
17,533
9,612
15,843
10,641
12,492
10,038
8,920
7,664
5,032
2,704
8,122
1,754
4,353
5,944
6,686
7,760
6,059
6,672
10,509
14,747
15,502
14,974
14,530
13,125
11,349
11,667
11,335
11,585
13,510
14,862
17,757
15,343
17,202
16,882
15,947
18,489
20,842
24,498
27,841
27,606
17,590
24,491
22,105
23,710
31,361
27,945
25,889
31,123
37,423
25,609
35,971
27,754
22,560
28,339
28,568
29,084
31,731
50,134
63,526
7,236
9,796
22,096
15,251
16,242
12,116
17,301
16,465
15,287
16,711
12,333
13,845
17,718
17,032
17,855
15,772
19,658
22,634
23,298
23,120
43,268
45,921
49,504
54,180
48,517
54,283
59,800
58,354
58,920
60,667
63,190
69,012
70,476
71,334
73,342
74,718
76,964
82,859
85,807
92,550
Asbestos Diseases and Insurance
Page 23 of 27
Settlement
Year
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
AVERAGE SETTLED CLAIM COST BY SETTLEMENT YEAR - includes nils
Pleural Plaques
Asbestos Related
Pleural
(Scottish & NI
Asbestosis
Mesothelioma
Lung Cancer
Thickening
exposure only)
20,473
10,592
16,365
25,139
20,312
12,812
10,612
24,759
6,458
10,493
6,007
57,842
25,754
10,290
13,602
17,148
38,092
34,121
12,317
20,993
17,869
33,884
6,895
11,641
21,825
18,547
39,558
14,387
9,945
11,495
10,039
36,788
11,891
10,197
20,958
7,764
44,135
10,615
12,298
20,117
8,679
38,515
7,518
9,930
16,117
13,084
48,579
7,819
11,945
24,240
11,711
45,593
5,792
12,455
11,736
11,537
52,720
6,437
14,128
25,369
11,052
57,725
3,853
13,303
21,225
12,094
58,157
3,458
17,439
26,172
14,504
66,843
908
15,009
22,350
12,787
67,058
2,198
15,922
28,566
18,305
64,047
2,632
16,980
27,390
15,178
72,643
3,683
15,616
24,208
17,334
69,465
4,205
17,745
27,302
19,269
74,912
AVERAGE AGE OF CLAIMANT AT NOTIFICATION BY NOTIFICATION YEAR
Notification
Year
Pleural Plaques
(Scottish & NI
exposure only)
Asbestosis
Asbestos
Related Lung
Cancer
Pleural
Thickeni
ng
Mesothelioma
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
66.0
64.0
62.7
66.4
67.2
62.0
69.5
70.9
64.2
67.5
68.4
69.5
69.0
68.5
69.0
70.5
69.2
70.0
70.2
71.8
57.0
65.1
62.8
66.0
66.0
65.3
65.7
67.7
69.2
69.3
70.1
71.2
72.3
72.9
73.3
74.2
73.7
74.6
75.2
75.7
65.7
65.3
66.7
65.8
69.9
64.1
67.9
71.0
68.7
70.9
70.1
72.0
72.1
72.3
73.8
73.9
73.0
74.4
73.6
74.8
30.8
58.1
42.8
60.2
61.5
61.2
60.5
63.5
65.6
65.9
66.2
67.0
68.3
68.7
69.9
70.2
70.3
72.1
72.6
71.9
63.2
62.5
62.9
64.6
65.4
66.4
66.2
67.1
67.6
68.9
69.6
69.5
70.6
70.8
72.4
72.8
72.7
73.2
73.2
73.9
70.3
74.7
74.0
71.4
73.2
70.7
75.2
74.3
72.2
73.5
5yr simple
3yr simple
Asbestos Diseases and Insurance
Page 24 of 27
Annex 3 - Other Insurance Classes & Asbestos
Professional Indemnity (PI)
The main potential areas of asbestos exposure in the professional indemnity arena lie in the
surveyors market. In general terms there seems to be no particular pattern to managing asbestos
exposure as policies can variously be silent on asbestos, expressly excluded or capped to a specific
sub-limit. Where there is a perceived, potential asbestos exposure then the cover is often either
excluded or restricted to a small aggregate limit and excluding bodily injury or property damage
claims. For example the standard Royal Institute of Chartered Surveyors (RICS) standard
insurance wording includes a £250K in the aggregate indemnity limit relating to certain, specified
asbestos risks.
There are insurers who provide specific cover for asbestos liabilities. These include Design and
Construct PI cover, which protects contractors against claims arising from construction projects (it
is also likely that an underlying architect will also have some PI cover in place). Similarly, there is
also a well-established professional indemnity market for asbestos surveyors. Deriving from the
Control of Asbestos Regulations, which highlight a specific obligation on relevant persons to check
whether their premises contains asbestos, this PI cover would indemnify a building surveyor against
claims for failure to identify asbestos, or the specific incorrect identification of asbestos. This cover
would also normally protect against claims for consequent delay and possible distress claims
arising from the failure to identify asbestos.
Environmental
In most cases, under a premises policy, asbestos within buildings and structures is excluded,
though normally with a write-back for clean-up remediation costs relating to pollution arising from
asbestos in soil and groundwater. However, this cover tends to be used primarily to address
historical exposures rather than a new pollution condition, so assessment of contaminated land
reports is required. We are also aware that some policies provide inadvertent disturbance of
asbestos which occurs as part of covered operations being insured. Otherwise the ‘known
exposure’ is excluded, unless insurers choose to grant coverage based on the exposure being
properly managed/sub-contracted out by a licensed and experienced party.
Asbestos Removal Contractors
Prior to 2006 there were very few insurance options available to asbestos removal contractors as
most insurers were not willing to consider this exposure. As this niche class of business developed
and became increasingly profitable, inevitably, increased capacity entered the market and
competitive forces came to bear. However, though this has impacted premium levels, it appears
that the terms and conditions available in the market has not hugely changed.
Apart from the obvious risk associated with this type of exposure the main concern of insurers is
the storage and/or ultimate disposal of the asbestos waste and many of the special terms and
conditions deal with this aspect. A “typical” policy will/may have the following features:
Asbestos Diseases and Insurance
Page 25 of 27
Policy Trigger - will always be “claims made” - Retro Date Inception. Insurers normally provide an
extended reporting period often limited to 12 months.
Exclusions - apart from the normal exclusions, additional exclusions may/will include:
a)
b)
c)
d)
e)
f)
Pure Economic Loss (Financial Loss);
Pollution - other than ‘sudden and accidental’
Ownership and/or operation of landfill sites;
Work in hazardous locations such as petro-chemical works, petrol refineries, nuclear
installations and offshore installations;
Hazardous work such as work underground below 5 metres, use of explosives, pure demolition
and fly-tipping;
Diminution in the value of property.
Warranties: Any breach of a warranty could have serious consequences for the Insured depending
on how such breaches are dealt with by the policy.
a)
b)
c)
d)
e)
f)
Bona fide sub-contractors - this warranty deals with steps/action the Insured has to take to
ensure that bona fide sub-contractors have adequate insurance of their own which also
provides indemnity to the Insured;
Underground Services - this warranty sets out the Insured’s obligations when working
underground where underground services may be present. Often additional terms and
conditions are applied;
Waste disposal - this warranty states that the Insured must take waste to licensed sites and
where transport of such waste is carried out by third parties that they are also licensed to carry
out the removal;
Skip - this warranty states that the Insured must comply with all the necessary legislation
regarding the use of skips;
Burning and welding - this warranty sets out the Insured’s obligations when using burning and
welding equipment;
Asbestos Handling - when the Insured is engaged in any activity involving the handling,
removal, transportation or disposal of asbestos and/or any asbestos containing materials the
following are warranted:
 that all conditions and recommendations set out in the Approved Codes of Practice and
Guidance notes issued by the Health and Safety Executive are followed;
 that the Asbestos (Licensing) Regulation 1983 as amended by subsequent Guidance on
Regulations L11 by the Health and Safety Executive are observed;
 that the Insured must comply with any other existing, replacing or subsequentlegislation or
Codes of Practice imposed by the industry.
One question we cannot answer at the present time is whether, say in twenty years’ time, the
decision to enter this supposedly profitable business was the right one.
Property Owners Liability
We are aware that some property owner’s liability policies sub-limit or, conversely, are silent on the
treatment of asbestos liabilities..
Asbestos Diseases and Insurance
Page 26 of 27
International Underwriting Association
1 Minster Court
Mincing Lane
London
EC3R 7AA
Tel
Email
Web
Twitter
020 7617 4444
[email protected]
www.iua.co.uk
@IUAofLondon
The International Underwriting Association of London (IUA) is the focal representative and market
organisation for non-Lloyd’s international and wholesale insurance and reinsurance companies
operating in the London Market. It exists to promote and enhance the business environment for
international insurance and reinsurance companies operating in or through London.
Asbestos Diseases and Insurance
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