Asbestos and Contamination Exclusion
The asbestos and contamination exclusion comprehensively removes damage, costs and liability claims arising from the presence, release or removal of asbestos from property and liability policies.
- Clause type
- Exclusion
- Origin/Market
- International programme
- Favours
- Insurer
- Negotiability
- Market standard
Purpose
Asbestos-related latent losses are among the largest liability and property loss complexes in insurance history, since illnesses can emerge decades after exposure and remediation costs are notoriously difficult to quantify. Insurers therefore consistently exclude all loss, cost and claims connected with asbestos in any form from the base cover.
Effect and limits
The exclusion typically catches any loss arising out of, resulting from, caused by, or contributed to by asbestos, exposure to asbestos, or the use of asbestos – including regulator-mandated remediation, testing and disposal costs. Courts regularly construe such exclusions broadly: what matters is simply whether the loss results from asbestos within the meaning of the clause, regardless of the legal theory pleaded (for example a failure to disclose asbestos on a property sale). The exclusion applies irrespective of the form or concentration of asbestos unless the policy provides an express carve-back.
Negotiation and practice
For older buildings or industrial risks with potential asbestos exposure, it is worth checking whether a separate environmental liability or remediation cost policy with an explicit asbestos buy-back is available. Buyers and sellers of existing properties should factor the exclusion into due diligence, since a failure to disclose known asbestos is regularly caught by the exclusion in the event of a subsequent claim as well.