Are you covered for lead-based paint claims?During the last quarter of 1996, New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. landlords were forced to comply with new Federal regulations governing the disclosure of the existence of lead-based paint in apartment buildings built prior to 1978. Most of you have begun to painstakingly pains·tak·ing adj. Marked by or requiring great pains; very careful and diligent. See Synonyms at meticulous. n. Extremely careful and diligent work or effort. comply. During my visit to a Queens property owner recently, I watched as he signed over 200 disclosure forms just during the one hour I was there. While the new year has brought with it much optimism for many in the real estate industry, the lead-based paint issue remains a thorn in the side of owners of apartment buildings throughout the nation. Experts anticipate a huge increase in lead liability claims in 1997 due in large part to increased public awareness of the issue, as well as a vast increase in the amount of housing units nationwide that will be notified of potential lead-based paint poisoning hazards. Many landlords shrug off shrug v. shrugged, shrug·ging, shrugs v.tr. To raise (the shoulders), especially as a gesture of doubt, disdain, or indifference. v.intr. the potential for large financial loss due to lead based paint claims. "It won't happen to me, I paint my buildings every two years," a Bronx owner recently told me. Unfortunately, painting over walls with lead-free paint does not eliminate the real cause of most lead-based poisoning claims - lead dust which can be present in apartments years after the initial application of lead-based paint. So apartment house owners house owner n → Hausbesitzer(in) m(f) are left asking what appears to be a simple question. "Do my insurance policies cover me against lead-based liability claims?" Unfortunately, simple questions do not always have simple answers. Listed below are explanations for the insurance situations most property owners currently find themselves in. General Liability Policies with Specific Lead-Based Paint Exclusions Most carriers have asked for and been granted from the NYS 1. Is not. See Nis. Insurance Department the right to attach a lead-based paint exclusion to their General Liability policies. While written notice must be given to all policy-holders of such a change in coverage prior to renewal of the policy, not every policy-holder actually becomes aware of the status of their policies. When attached to the Comprehensive General Liability Policy there is absolutely no coverage, (legal expense or claim settlements) for lead-based paint claims. General Liability Policies Without Specific Lead Based Paint Exclusions Most carriers who do not specifically exclude lead-based paint claims have held that lead-based paint poisoning should be considered a pollutant pol·lut·ant n. Something that pollutes, especially a waste material that contaminates air, soil, or water. under the Absolute Pollution Exclusion found in most Comprehensive General Liability policies. While these carders must pay legal expense associated with such an action, they usually reserve their right not to pay the ensuing en·sue intr.v. en·sued, en·su·ing, en·sues 1. To follow as a consequence or result. See Synonyms at follow. 2. To take place subsequently. damages. Fortunately for policy-holders, this defense has not held up very well in the courts. In fact, this past October a United States District Court United States District Court In the U.S., any of the 94 trial courts of general jurisdiction in the federal judicial system. Each state, as well as the District of Columbia and the Commonwealth of Puerto Rico, has at least one federal district court. Judge ruled that insurers could not evade e·vade v. e·vad·ed, e·vad·ing, e·vades v.tr. 1. To escape or avoid by cleverness or deceit: evade arrest. 2. a. coverage of lead paint claims "because lead-based paint could not be regarded as an environmental pollutant." That's the good news for landlords. The bad news is there are only a handful of these carriers who will still write policies for residential real estate owners in the New York Metropolitan area New York–Northern New Jersey–Long Island is the most populous metropolitan area in the United States and the third most populous in the world, after Tokyo and Mexico City. , and underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. requirements for these policies has become quite demanding. Specific Lead-Based Paint Liability Policies These policies specifically offer coverage for lead-based paint liability claims. Many New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of area property owners have taken advantage of these policies in the last few years. The policies, while not as comprehensive as standard general liability policies, do offer some valuable protection against lead-based paint claims and the legal expense associated with them. It is important to be fully aware of specific coverage terms and pricing prior to pursuing these policies. How serious is the threat of lead based paint claims causing great financial hardship to property owners? While there have been more than a few multi-million dollar settlements in recent lead paint poisoning cases the majority of claims brought against landlords have settled for much lower amounts. In a study of 71 lead based paint claims from 1989-1996, 'Mealey's Lead Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. Reports" found that 61 percent of the cases settled for under $100,000. Only 19 percent of the cases settled for over $500,000. It is apparent that as with other third party actions like "slip and falls," many lead based paint claims are being made without much evidence of a landlord's negligence. Regardless of the severity of the case, these claims could certainly soak valuable dollars from a landlord's pocket in defense and settlement costs if left totally unprotected. Be sure to evaluate your options carefully in regard to how to best protect yourself against lead based paint claims. As with any aspect of your commercial insurance program, carefully select an insurance professional who can advise you as to what available insurance products and services are best for you. |
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