Munich Re advises exclusion of cover for silica-related diseases.

In a report on occupational disease risks that was submitted to an Australian Government inquiry into workplace exposure to toxic dust, Munich Re's Michal Mekota said liability risks posed by diseases caused by exposure to crystalline silica were serious but not disastrous.

However, future litigation trends in the US would determine the “order of magnitude of silicosis as a claims complex”. “According to the latest study by the Insurance Information Institute, silica-related diseases are normally not excluded from general liability, product liability and commercial umbrella policies. Since the use of crystalline silica will continue in the US, and many other parts of the world, insurers and reinsurers should carefully check whether such conditions should be explicitly excluded in policy wordings,” he said.

The dust disease silicosis has been compared to asbestosis, but it is widely accepted that industry exposure to silica-related disease will not be on the same scale as asbestos, the report said.

Mekota said comparisons of the two lung diseases showed that, although millions of people may have been exposed to silica, the chance of silicosis developing and causing death is lower than in people exposed to asbestos. While the number of silicosis claims are rising, the number of deaths are declining. By contrast, asbestos-related deaths are increasing.

Plaintiff lawyers currently use the same litigation techniques for silicosis as for asbestos, organising mass screenings of potentially exposed workers and consulting the same doctors. Mekota said there were indications old asbestos cases were being “re-opened and re-labelled” as silicosis cases. “In addition to seeking remuneration under workers' compensation, it is anticipated plaintiffs will attempt to circumvent workers' compensation... [and place] the blame squarely on employers' shoulders by charging them with deliberately exposing them to a known and serious danger.” Silica producers and product suppliers also are at risk.

Mekota said if litigation remains limited to workers' compensation the industry's financial exposure should be limited. “However, if strict liability were introduced, as in the case of asbestos, plaintiffs would not have to prove their disease was caused by exposure to a particular product. Instead, they would merely have to prove they were exposed to crystalline silica.”