Lead Exposures in Australia - Should Insurers Be Worried Yet?
To date, liability insurers in Australia have received very few lead poisoning claims.
Is this about to change?
Lead contamination has been present in many sectors of the community for many years. Often it is at a relatively low level, but even at a low level it can be bad enough.
Government agencies and community groups are becoming more active in this field. In 2012 the National Health and Medical Research Council took a stronger interest in lead poisoning and established the Lead Working Committee. The NHMRC is the leading Australian government agency, charged with promoting the development and maintenance of public and individual health standards. In May 2015 it released the NHMRC Statement: Evidence on the Effects of Lead on Human Health which clearly indicated that even low lead levels were associated with adverse health effects.
“The Evidence Review found an association between blood lead levels less than 10 micrograms per decilitre and health effects, including reduced Intelligence Quotient and academic achievement in children, behavioural problems in children, increased blood pressure in adults and a delay in sexual maturation in adolescent boys and girls...If a person has a blood lead level greater than 5 micrograms per decilitre, it is recommended that the source of exposure should be investigated."1
It has been estimated that up to 100,000 Australian children could have blood lead levels that breach the new standard. Clearly, lead poisoning, its effects and a causal relationship to blood lead levels are getting increased attention. If lead poisoning litigation begins in Australia, there could be at least 100,000 potential plaintiffs (likely many more). Proof of IQ impairment has been difficult in the past, but in the U.S. a blood lead level of 10 micrograms per deciliter or higher is now enough evidence to sustain a loss of IQ allegation. Australian courts could easily adopt this or a similar test.
Lead contamination hotspots include cities where lead mining and smelting has taken place, such as Broken Hill, Port Kembla, Port Pirie, Mount Isa, Newcastle, Wollongong and Esperance. However, even the capital cities have areas where lead contamination is exceptionally high, often from past activities. Last year Macquarie University environmental scientist Professor Mark Taylor found high levels of lead in soil samples in Sydney City, Leichhardt, Marrickville and Willoughby.
Where is lead contamination often encountered?
- New housing or schools built on or near old industrial estates that have lead contamination
- Lead paint in houses built prior to the 1970s
- Lead pipes in old houses and the water supply pipe network
Where did the lead come from?
- Some Australian industrial concerns still use lead in their processes and products.
- Many more of them used lead in the past.
Australian Commercial General Liability policies typically trigger off injury in the period of insurance coverage, so today’s CGL underwriters may have significant exposures from lead contamination. Lead contamination is not a standard exclusion in most policies. Gradual pollution is a standard exclusion, but this exclusion has been read down in some cases. For the small number of insureds who have well-known lead operations, liability underwriters in Australia already ask questions and may impose coverage restrictions but beyond this small number of obvious policies, not many questions are being asked about lead exposures.
How to address the exposure?
- If it's possible the applicant could have used lead in industrial processing, make specific enquiries about lead exposures.
- Consider placing limitations on policy coverage.
In the U.S. lead exclusions are common. In the Asia Pacific region, liability underwriters in China are leading the charge with lead exclusions. Australia has yet to wake up.