CGL pollution exclusion provisions and the sick building syndrome.

• Author: Mitchell, William J.

Despite valiant rewriting efforts, pollution exclusions, absolute or not, do not always preclude liability for a variety of ills

AN INSURANCE policy is an agreement in which one party, the insurer, in exchange for consideration from the insured, promises to make a certain payment on the occurrence of some specified contingency. The policy is a contract in which the primary requisite is an undertaking to transfer that risk to the insurer, who assumes the risk of loss. Some of the risk transferred to the insurer may be excluded by provisions that eliminate protection for certain types of losses that otherwise would be within the scope of coverage.

"Sick building syndrome" is a term applied to situations in which some factor or combination of factors--such as chemicals, smoke or fumes--create poor indoor air quality in residential or commercial buildings, causing health complaints.(1) Indoor air quality potentially can be impacted by hundreds of different chemicals, including substances that are common components of everyday life. In fact, more than 900 different organic compounds alone have been identified in indoor air.(2) Individuals asserting claims of illness caused by exposure to the sick building syndrome or any types of indoor air contaminants have come to view litigation as their only recourse.(3) Once suit is brought against building owners or third parties the owners implead, insurer are looked to for defense and indemnification.

Three recent cases from Wisconsin, Florida and New York have considered the new question of whether insurance coverage extends to the sick building syndrome or whether the absolute pollution exclusion precludes coverage. These are the only cases found to that have addressed this emerging issue, and they are divided on the answer.

WHAT IT IS AND LEGAL THEORIES OF RECOVERY

The prevalence of harmful natural and manmade substances in indoor air, combined with poorly ventilated buildings and the large amount of time people spend indoors, can lead to certain poor health conditions. As people become aware of this, indoor atmospheres are blamed for previously unexperienced or unexplained maladies. In severe cases, people suffering poor health or those whose property value has diminished have sought legal remedies.

1. Origins

   Indoor air pollution was first classified as "tight building syndrome" during the energy crisis of the 1970s. As a result of efforts by the public and private sectors to reduce energy costs through conservation, the trend in new commercial buildings was to design and construct completely sealed, energy-efficient building shells.(4) Both the initial and continued use of the tight-building concept is unfortunate, however, because such buildings represent only a fraction of the total building population, and there is considerable evidence to suggest that sick building-type symptoms are common to many buildings, not just "tight buildings." While tight buildings keep poor interior air in, they also protect the interior from contaminated exterior air. Most important, poor ventilation within a building is the leading cause of health problems.(5)

   Most people in the United States spend 90 percent or more of their time indoors, primarily at home and at work. Indoor air concentrations of toxins, even if they are uniformly lower than outdoor levels, make a significant contribution to the time-weighted, average exposures to most air pollutants. Americans rely heavily on heating, ventilation and air conditioning (HVAC) systems, which are the "mechanical lungs" of large buildings. HVAC systems include all heating, cooling and ventilating units, as well as ductwork, filters, exhaust fans and fresh-air intake units. Thus, these systems feed most people most of what they breathe.

   The potential for spreading contaminants through a building's ventilation system is perhaps best exemplified by the disastrous effects on some of the attendees at the American Legion's convention in Philadelphia's Bellevue Stratford Hotel in 1976. The bacteria now named after the outbreak of Legionnaires' disease, Legionella pneumophila, had been around for a long time, but ironically, highly efficient heating, ventilation and air conditioning provided a vehicle for it to incubate to highly dangerous levels and become part of the constantly recirculated air. Of the 4,400 attendees, 221 became ill, and 29 died within a few days of the convention.(6)

2. Categories of Indoor Air Pollution

   Personal injury claims resulting from indoor air pollution are divided into three categories: sick building syndrome, building related illness, and multiple chemical sensitivity. While each of these terms is related to the broader concept of indoor air pollution, each is distinct because it has different problems of causation.(7)

   Sick building syndrome involves a building with a significant number of occupants who complain of health problems or discomfort, where the problems diminish when they leave the building, and there is no discoverable direct link between the building source and the problems encountered. Common symptoms include tired or strained eyes, unusual tiredness, fatigue or drowsiness, headaches, tension, irritability or nervousness, stuffy or runny nose, sinus congestion, chest tightness and wheezing, skin dryness, and gastrointestinal complaints.

   Building-related illness is characterized by a clinically diagnosable illness, showing a clear and direct link between an identifiable building source and the specific illness. Building-related illness symptoms include coughing, chest tightness, fever, chills, infection, and muscle aches. These symptoms can be serious, require prolonged recovery, and may not subside even after the afflicted person leaves the building.

   Multiple chemical sensitivity is a hotly debated new and developing "diagnosis," with no consensus as to what it actually is. This disease is contracted when a susceptible individual has adverse reactions to commonly encountered chemicals. Once the sensitivity develops, individuals with multiple chemical sensitivity become sick when exposed to even minimal concentrations of the offending chemicals at different locations. Typical symptoms include migraines, burning of the skin, muscle and joint pain, palpitations, blurred vision, gastrointestinal problems, concentration and memory deficits, and respiratory disorders. Because there is some debate as to whether multiple chemical sensitivity actually exists, it would be difficult to premise liability on its sudden appearance.(8)

   The focus of this article is on sick building syndrome, although many of the considerations are valid with respect to the other maladies caused by indoor air pollution.

3. Causes of Sick Building Syndrome

   The more frequently found causes of sick building syndrome include volatile organic and synthetic compounds, radon and biological sources. Both organic and synthetic compounds are commonly found in pesticides, floor coverings, building materials, paint, insulation, drapes and carbonless copy paper. Both organic and synthetic compounds also can be found in emissions from office equipment, dust, cigarettes, and office supplies such as glues, solvents, cleaning agents.

   Radon is a naturally occurring, colorless, odorless and tasteless radioactive gas generally found in soil or rock beneath a building. It sometimes is present in certain types of building materials. Radon is a decay product of uranium, and it in turn decays to form radioactive progeny that may attach to dust particles or remain unattached. If these progeny are inhaled, they can be drawn into the lungs, where they emit alpha energy and may cause lung cancer.

   Biological bacteria, fungi, mold and viruses are transferred by a building's HVAC system.(9) Biological sources can cause a wide variety of illnesses, from the common cold to hypersensitivity pneumonitis, humidifier fever, asthma and Legionnaires' disease.

   The location of the fresh air intakes also may be troublesome, capable of introducing outdoor air pollutants such as carbon monoxide from automobiles into a building's ventilation system. Those placed near parking lots, garages, dumpsters, loading docks, standing water or exhaust fans can lead to problems indoors.

   Finally, sick building syndrome is not simply an environmentally induced disorder arising from exposure to one's indoor environment. Personal, psychological and occupational variables, which often are neglected in sick building investigations, may be of considerable importance in the etiology of sick building syndrome.

4. Legal Theories of Recovery

   The two basic types of claims made in the area of indoor air quality are bodily injury and property damage.

   Bodily injury claims are typically made by employee occupants for injuries allegedly caused either by building exposures or by workplace discrimination for the employer's failure to accommodate the employee's particular sensitivities--for example, allergies to tobacco smoke.

   Property damage claims are brought by building occupants based on the introduction of toxic substances into the building, or for the loss of use of the occupied space, or for other economic loss. Building owners, managers, contractors performing repair or renovation work, architects, engineers, maintenance companies, and manufacturers and installers of building materials and ventilation systems may be first- or third-party defendants for property damage or bodily injury.(10)

   The most-used theory of recovery is negligence, but other...