The terrible news of a Legionnaires’ Disease outbreak in Stoke on Trent serves as a reminder of the potential liabilities and business interruptions that can impact any organisation operating cooling towers, evaporative condensers, spa pools, hot and cold water systems and other purpose-built systems that involve use of water.
What is Legionnaires’ disease?
Legionnaires’ Disease is a potentially fatal, pneumonia-like illness caused by legionella bacteria. It is caught by inhaling small, airborne droplets of water containing the bacteria. It is not known to spread from person to person. Legionella bacteria are widespread in natural water systems (rivers and ponds); however, outbreaks of the illness usually occur from exposure to legionella growing in purpose-built systems where water is maintained at a temperature within the range that encourages growth.
The following conditions increase the risk presented by the presence of legionella bacteria in water systems:
- Water temperature between 20–45 °C (as this gives optimal conditions for the bacteria to grow).
- Creating and spreading breathable droplets of water, e.g. aerosol created by a cooling tower.
- Stagnant, stored and/or re-circulated water.
- A food source for the bacteria, e.g. presence of sludge or scale.
What are the implications to an organisation of a Legionnaires’ Disease outbreak?
If an outbreak of Legionnaires’ Disease occurs, it is likely the Health and Safety Executive (HSE) will launch an investigation in an attempt to identify the source. This will usually involve inspections of businesses operating systems that involve the use of water. It is important to note that in many instances the cause of an outbreak is never conclusively identified. However, the investigation process may lead to the HSE identifying failings in an organisation’s management systems relating to the control of legionella bacteria. As a result, they may issue Improvement or Prohibition Notices or even initiate prosecutions. HSE investigations, compliance with Improvement or Prohibition Notices or dealing with a prosecution can disrupt operations and require unplanned shut down of certain processes or equipment. They can also cost time and money and cause damage to reputation. If liability for the outbreak is proven, then the organisation concerned may face compensation claims from persons who contracted the disease (or their families)
The insurance position
1. Public liability
The position varies from policy to policy and it is important to work with your broker or insurer to understand the extent of cover, if any, you have for liabilities relating to Legionnaires’ Disease. The possible scenarios are:
A) The policy specifically excludes cover.
B) The policy specifically includes cover. In these instances it may be limited to claims made during the period of insurance or have other restrictions such an ‘inner limit’ (e.g. a limit per claim or an aggregate limit for all claims in the policy year). The policy limit may be inclusive of legal and other costs.
C) The policy is silent on the subject. This should not be taken to mean that cover is therefore included, as the insurer may be relying on the pollution/contamination exclusion to exclude such cover.
Where cover is ‘claims made’ then care is required to ensure continuous cover applies if you move to a new insurer (or that appropriate ‘run -off cover’ is arranged under the old policy). ‘Inner limits’ can often be topped up with an excess layer of cover,
subject to full disclosure of all material facts. Where cover is excluded or limited, or the policy is silent then it is usually possible to get cover included for an additional premium, subject to disclosure of all material facts (often through a questionnaire).
2. Employers’ liability
Any proven liability for Legionnaires’ Disease contracted by an employee will almost certainly be covered by the policy.
3. Business interruption
Some business interruption policies include an extension relating to ‘notifiable diseases.’ Since there is a requirement for health professionals in the UK to notify the relevant health authorities of any case of Legionnaires’ Disease, this extension could provide
cover for loss of profit due to closure resulting from a notifable disease. We recommend you talk to your broker or insurer to understand whether you have any cover in place and whether it is adequate. (The sum insured relating to this extension is often limited). It may be possible to include cover or increase the limit in return for an additional premium.
Responding to a liability claim
If the worst happens and you do receive one or more liability claims from employees or the public, it is important to engage
with your insurers from the very start. This includes:
- Agreeing the appointment of mutually acceptable solicitors.
- Asking your employers’ liability and public liability insurers (if different) to appoint the same solicitor firm.
- Ensuring, wherever practicable, that the appointed solicitors attend HSE interviews with you, to ensure legal privilege.
- Ensuring you clear any press statements with insurers, to avoid prejudicing claims. (Insurers advice is usually to say nothing).
Risk management guidance
If you are an employer, or someone in control of premises, including landlords, you are required by law to manage the health
risks associated with legionella bacteria. In broad terms, this means you need to:
1. Undertake a risk assessment
You need to understand your water systems and associated equipment and determine whether they are likely to create a
risk from exposure to legionella bacteria. If you determine that there is a risk, then you need to identify any employees and/or
other persons who may be particularly at risk. If you do not feel competent to carry out this risk assessment, you may wish to take
2. Prevent, control and monitor the risk
Prevention is always the preferred risk management option. You should consider whether you can prevent the risk of legionella
bacteria by changing the type of water system you need. (This is probably most likely to be possible at the design stage of
premises). The HSE gives the example of replacing a wet cooling tower with a dry air-cooled system. If you identify a risk that you
are unable to prevent, you must take action to control the growth and multiplication of legionella bacteria. This includes:
- Ensuring water cannot stagnate anywhere in the system.
- Ensuring the release of water spray is properly controlled.
- Avoiding water temperatures and conditions that enable the growth of legionella bacteria.
- Keeping the system and the water in it clean through removal of scale and sludge, etc.
- Avoiding materials that encourage the growth of legionella bacteria.
- Treating water to kill legionella bacteria or limit their ability to grow.
- Monitoring and auditing the effectiveness of your controls, including through regular inspection and testing.
You may determine you need external, expert assistance to undertake some or all of the above actions. If so, you do need to check their competency and monitor their performance.
3. Keep records
If you have five or more employees you have to record and communicate any significant findings of your risk assessments. You should also record the steps you are taking to prevent or control the risks, including any treatment supplied and the results of any inspection, testing, monitoring or audit programmes undertaken. If you have less than five employees, you are not required by
law to complete written assessments. However, we strongly advise that you retain records of your control, treatment, inspection, testing, monitoring and audit actions.
The control of legionella bacteria in water systems. Approved Code of Practice and guidance (L8). ISBN 9780717617722. Available to download free of charge from the HSE website at: http://www.hse.gov.uk/pubns/priced/l8.pdf
Control of legionella bacteria in water systems: Audit checklists. ISBN/Code: 9780717621989. Available to purchase on the HSE
Statements concerning legal, tax or accounting matters should be understood to be general observations based solely on our experience as insurance brokers and should not be relied upon as legal, tax or accounting advice, which we are not authorised to provide. The information contained herein is based on sources we believe reliable and should be understood to be general risk management and insurance information only. The information is not intended to be taken as advice with respect to any individual situation and cannot be relied upon as such.