US insurers eye Legionnaires' disease safeguards as buildings reopen

Washington

COMMERCIAL insurers are scrutinising building managers' efforts to avoid outbreaks of Legionnaires' disease as they reopen movie theatres, gyms, schools and offices that had been closed for months due to the coronavirus pandemic.

Legionnaires' disease is a severe, sometimes lethal form of pneumonia caused by the Legionella bacteria that build up in pipes.

Environmental insurers, which collect roughly US$2 billion in annual premiums, would be on the hook for damages if there were outbreaks at buildings they cover.

"Legionella could be the deadliest waterborne illness in the US and another deadly consequence of Covid-19," said Veronica Benzinger, environmental service group leader for insurance broker Aon, referring to the illness caused by the novel coronavirus.

The pandemic-induced shutdown of businesses and schools has led to an unprecedented amount of stagnant water in dormant buildings.

These buildings then become potential breeding grounds for Legionella bacteria, which can be spread from toilets, sinks, showers and air-conditioning systems.

Some insurers are intensifying precautions against Legionnaires' disease before adding new clients or renewing coverage, insurers and brokers said. For instance, they may ask customers to document how they maintain plumbing and cooling systems.

Large commercial office buildings and manufacturing plants have professional maintenance staff, who likely kept water flowing throughout the crisis. Smaller buildings that insurers cover are at higher risk, experts said.

To avoid contamination, they must flush and sanitise pipes and disinfect cooling towers that use water to lower air temperature, they said.

The bacteria and disease get their name from a deadly outbreak following a 1976 American Legion convention in a Philadelphia hotel. The bacteria was ultimately discovered in the cooling tower of the hotel's air-conditioning system.

Nearly 50,000 people have been infected with Legionnaires' disease between 2000 and 2015, said the US Centers for Disease Control and Prevention.

Allianz has added Legionnaires' prevention to broader discussions with large industrial clients about the coronavirus pandemic, said Scott Steinmetz, global head of risk consulting within MidCorp, part of an Allianz speciality insurance unit.

Allianz has engineers helping customers prepare for reopening, he said. Allianz and AXA are also sending bulletins to clients about water system maintenance.

Insurers might limit Legionnaire's coverage amounts or impose higher deductibles if building systems are outdated, brokers said.

Insurers were already worried about possible outbreaks, because of elevated lawsuits and claims. They are stepping up their scrutiny even more due to the coronavirus pandemic.

In April, Illinois agreed to pay US$6.4 million to families of patients who died of Legionnaires' disease at a state-run veterans home. Other deaths have occurred in New York and Michigan. REUTERS