Responsive and Responsible Coverage: South Western and MedThree Explore the Implications of a Legionella Outbreak

Feb 2019

A cluster of at least seven cases of Legionnaires’ disease struck the Surrey area of British Columbia last September. Although the Fraser Health Authority was unable to confirm the source of the outbreak at the time, Legionella bacteria were discovered in the cooling towers of a local Walmart store. According to a report by Insurance Business Canada, the outbreak only serves to underscore the importance of business interruption and environmental liability insurance. Together, South Western Insurance Group Limited and sister company MedThree make both types of protection available. But in response to recent events, they are currently looking at ways to expand their existing coverage. As the bacteria responsible for Legionnaires’ disease – a serious respiratory illness that results in pneumonia – Legionella can spread through any building system that aerosolizes water, including fountains, hot tubs, cooling towers, and large plumbing systems. And while the risk of contracting the disease is generally quite low, Legionella does pose a particular threat to the elderly and anyone else with a weakened or compromised immune system. “Water droplets, mist, or vapour originating from contaminated sources like air conditioning units, whirlpool spas – even water used for drinking or bathing – has the potential to carry Legionella bacteria and infect the lungs of anyone breathing it in,” explains MedThree’s senior underwriter Connie Federico. “And although MedThree does not yet provide liability coverage for Legionella like that currently offered by SWG, we do address it on our property policy.” MedThree’s property insurance provides both business interruption and reputational damage coverage arising out of the outbreak of an infectious or contagious disease like Legionella. That coverage is automatically triggered any time an insured facility is closed – or has access restricted – by order of a civil or other governmental authority. But Federico believes that also addressing the liability aspect of Legionella would greatly benefit many of the healthcare facilities her company protects. Especially since facilities like nursing and retirement homes, hospitals and medical clinics, surgical facilities, and spa treatment centres often contain large or complex water systems that can serve as a source of infection. Ulli Garrett, casualty and pollution underwriter for South Western Insurance Group Limited could not agree more. Her company currently offers liability protection against bodily injury caused by pollution – including the kind that results from the spread of waterborne pollutants like Legionella – under their Environmental Premises Liability (EPL) policy. “But,” Garrett says, “we also recognize how important it is for non-EPL clients like healthcare and medical facilities – especially those dealing with children or seniors – to have access to coverage that will protect them against Legionella-related claims.” Which is why she is pleased to say that plans are afoot to explore the possibility of making Legionella liability protection available to MedThree clients. In the meantime, however, Garrett would like to remind and reassure brokers that clients carrying Environmental Premises Liability coverage are fully protected against Legionella outbreaks, as well as most other events involving respiratory-related pollutants.