UK businesses are now legally bound to control/remove asbestos contamination on their premises, with the threat of fines and/or imprisonment, under Regulation 4 of the Control of Asbestos at Work Regulations (CAWR). However, according to Jardine Lloyd Thompson, failure to do so could lead to insurers implementing coverage restrictions or refusing cover.
CAWR came into force in May imposing on the owners, leaseholders and managers of business properties which may contain asbestos, the obligation to compile and maintain an "asbestos register" and manage the material so that it is not a hazard.
Asbestos is recognised as one of the biggest occupational health problems ever encountered in the UK. The Health & Safety Executive (HSE) estimates that more than 3,000 people die each year in the UK from asbestos-related diseases and the figure is expected to rise to 10,000 by 2010. Asbestos killed 50,000 people in the UK in 30 years to 1998.
Many insurers now exclude cover for asbestos claims in standard insurances because of the growing number of claims both in the UK and US.
Stuart Winter, partner, JLT Risk Solutions, said: "Insurers have sought to restrict cover for liability arising from exposure of third parties to asbestos. This will undoubtedly affect property owners but will also have a significant impact on contractors and developers working on existing structures. The provision of a detailed 'asbestos register' should be a pre-requisite to any tender involving removal/renovation or upgrade of any building and that the risks associated with the contract should be properly analysed. In the event of any uncertainty, a survey may be required to establish the true nature of the existing materials.
"The cost of asbestos removal using licensed contractors (for whom cover remains available subject to strict policy compliance requirements) must be considered carefully in the risk analysis. In addition, unexpected and unanticipated exposure will create a cost that will ultimately impact the financial health of a company and should be avoided through careful risk management and observance of health and safety protocols."
