As lockdown restrictions due to COVID-19 lift, many commercial building owners,
property managers, and occupants will face concerns over the safety of
buildings. A clean building will minimize the risk of spreading COVID-19
infections to the occupants. But how does a stakeholder in a property know if
the cleaning services vendors are capable of doing a good job in cleaning and
disinfecting a building?
One of the most effective tools to vet the vendors of those cleaning
services is to require contractors pollution liability insurance with an
affirmative coverage grant endorsement for virus or biohazard cleaning
services. This article provides advice on how to manage the COVID-19 risk in
the process of cleaning and disinfecting buildings.
Managing COVID-19 Risk in Buildings
The risk management picture for COVID-19 was a three-ring circus in March
2020. No one was ready to manage the risk of a pandemic when the government
issued stay-at-home orders on March 10, 2020. At that time, there were no
generally accepted and legally defensible cleaning protocols for virus
decontamination services. The vendors offering cleaning services had to figure
out what to do.
The pandemic caught the insurance industry flat-footed. Insurance companies
had policies in force with an arcane array of exclusions for communicable
diseases and other contaminants. Many of the pollution insurance policies that
were in force were silent on a virus being a covered pollutant or not. To add
to the confusion, some of those environmental insurance policies specifically
included virus and microbial matter as defined "pollutants" and also
contained a communicable disease exclusion.
To add to the confusion, some senior insurance company representatives
openly expressed that their insurance company intended to deny all COVID-19
claims on contractors pollution liability (CPL) insurance policies sold to the
contractors providing coronavirus cleaning services because there had been a
material change in the risk of the policyholder. It did not matter to them that
their CPL policy listed virus as a specifically defined "pollutant"
and it did not have a communicable disease exclusion either.
In response to the pandemic, leaders in the cleaning and restoration
business mobilized to develop the needed legally defensible virus cleaning
protocols that were published on March 18, 2020. At the same time, pioneers in
the environmental insurance marketplace developed the underwriting guidelines
for CPL insurance featuring affirmative coverage grants for virus and biohazard
decontamination services. But that coverage was only being offered to current
customers of the insurance company if those customers met the underwriting
guidelines. By June 2020, new qualified buyers of CPL insurance were able to
access meaningful coverage of coronavirus decontamination services.
Today, the stakeholders in commercial properties can take advantage of all
the research conducted by the insurance companies to pick the low-risk
biohazard mitigation vendors from the high-risk vendors through the insurance
company's underwriting guidelines. Simply by asking the virus cleaning
services vendors for CPL insurance with an affirmative coverage grant
endorsement for virus or biohazard cleaning services, the stakeholders in a
property will benefit by the research and development risk-selection criteria
created by the insurance companies.
If a vendor has this insurance coverage in place, the insurance certificate
holder knows the vendor has passed the scrutiny of the insurance underwriting
process. That insurance underwriting process is much more informed and detailed
than any selection criteria a building owner is likely to impose in the
selection criteria for cleaning services.
Common Questions
When building stakeholders are considering getting people back to work,
there are three questions that are commonly asked.
- Is the building currently "safe" to reopen, and how will I know
that?
- How do I know that my cleaning services vendors are qualified to perform
the work they do in virus cleaning and disinfecting?
- What should I do if there is a postreopening exposure to a COVID-19-infected occupant?
Let's look at these questions from the standpoint of the relationship
between building owners or managers and the service companies that provide
cleaning and sanitation services.
To start in answering these questions, it helps to know that, in general,
cleaning firms are not licensed professionals for the services they provide,
and up until March 18, 2020, there was no legally defensible cleaning and
disinfecting protocol for a virus-driven biohazard. This also means most
cleaning services vendors have not had the opportunity to engage in third-party
expert training in virus biohazard cleaning and disinfecting.
Out of necessity, in spring 2020, the virus cleaning services business was
like the Wild West; people were willing to do the right thing as soon as they
could figure out what the right thing was. Unlike mold and water-borne bacteria
contamination remediation services, there are no professional standards or
guidelines for virus cleaning and disinfecting services, and there are no
independently certified firms in the virus cleaning and disinfecting services
business either. Figuring out what effective virus cleaning and disinfecting
protocols entailed took some time.
The virus risk presents unique characteristics that risk management
professionals are not used to dealing with. One is that a virus is a very small
thing that, with enough of a dose, can cause death. The presence or absence of
a virus in the built environment at any point in time cannot be verified on a
reliable or affordable basis. Therefore, prudent risk management dictates that
with the current infection rates in the United States, the presence of the
coronavirus on the surfaces of a building needs to be assumed, even
postcleaning.
To put things into perspective, how small is a virus in relative terms? One
blood cell will hold many tens of thousands of copies of a virus. It takes an
electron microscope to see a virus. A virus is smaller than a wave of light is
long; therefore, a virus can have no color because a virus cannot reflect
light. Those pretty pictures of the coronavirus with the blue sphere and little
red crowns—they are an artist's rendering of the coronavirus based on the
types of fat and proteins that are known to make it up.
Governmental agencies zeroed in on preventing the spread of the coronavirus
through human-to-human contact early on. Federal and state governments have
issued guidance on how to mitigate the spread of the coronavirus by promoting
social distancing and wearing face masks in the work environment, for example.
But advice from the government on how to actually go about cleaning and
disinfecting the spaces people occupy in a building is sparse.
Is the Building Safe?
No one can certify that a building occupied by a human in the past 2 weeks
is completely free of virus contamination and is, therefore, "safe."
The first surface test for the coronavirus that I saw come to the market was in
May 2020. It cost $200 per sample swab. One industrial hygienist that I have
confidence in told me he would not feel comfortable representing that a typical
cubical workspace was virus-free without taking six swabs. In reality, no one
is going to pay to get a building tested to see if there is coronavirus present
at a cost of $1,200 per workstation, especially when cleaning the workstation
with legally defensible cleaning protocols would cost about $12.
Paying $1,200 to test a workstation for the presence of coronavirus is
irrational if you consider that if the test reveals the presence of
coronavirus, the cure is to clean the workstation for $12. The bottom line is
every building that has been occupied by a human in the past 14 days could have
coronavirus present, and it is impossible to determine that the building does
or does not have coronavirus present. That is true even after a person known to
have COVID-19 has occupied the building.
Why 14 days? That is the length of time that a coronavirus can survive on a
surface and still be able to infect someone if somehow the person was exposed
to enough of a dose of the virus to cause illness. If a building is free of
human occupancy for 14 days or more, then the virus is no longer viable and is
unable to infect anyone. But that known-to-be "safe" status of the
building changes with the next human occupant or delivery of the next parcel.
That safe status changes dramatically with one sneeze from an infected person
not wearing a face mask in a typical office conference room.
We understand more about this virus every day, but there is still more to
learn about its transmission. It is well understood that the virus is certainly
communicated through respiratory aspiration by infected individuals, which is,
in turn, inhaled by others, spreading the virus through the exposed population.
It is not known with a great deal of certainty what level transmission occurs
as a result of contaminated surfaces—whether it can be communicated by surface
transference or what dose of the virus does it take to create illness. In an
abundance of caution, building owners and managers are wise to manage both
transmission pathways, human to human and surface to human.
It is the contaminated surfaces risk that creates the demand for specialized
cleaning contractors to provide services to reduce or eliminate the viral
contamination of surfaces. But a clean surface now can be quickly contaminated
moments later if other virus transmission mitigation efforts fail. In the new
normal, buildings will need to be cleaner than they ever have been. There will
be a lot more demand for qualified and legally defensible biohazard cleaning
services in the new normal.
If a person known to have COVID-19 has been in a building, all of the areas
the person may have been in contact with needs to be cleaned, utilizing the
effective cleaning protocols discussed below.
With the cost of virus detection being so high, the only practical risk
management solutions to lower the odds of virus transmission through the
surfaces in buildings are cleaning and sanitizing. But not all methods of doing
that are equally effective in their result. Following the best available
practices in conducting cleaning and sanitizing work will help make the
stakeholders in the property legally defensible if an infected plaintiff, or
that person's estate, alleges that they contracted coronavirus from a
building that was not properly maintained.
The cleaning and restoration contracting industry, which has developed
extensive American National Standards Institute (ANSI) accredited standards and
guidelines for cleaning and remediating the biohazards of mold and bacteria,
does not have an ANSI-accredited standard for the cleaning of virus
contamination. However, what these firms now have to work with is The COVID-19 Pandemic—A Report for
Professional Cleaning and Restoration Contractors ("COVID-19
report"). Originally released in two parts on March 18, 2020, the third
edition of this 22-page document was issued by the leading trade
organizations in the cleaning and restoration contracting business on May 28,
2020. The report is a compilation of the best practices in virus cleaning and
disinfecting. It was drafted with input from the leading authorities on
biohazard cleaning in North America.
The COVID-19 report provides a measure of health and safety protection for
both service employees as well as for their customers and the occupants in
buildings. It also addresses recommended contract provisions for cleaning and
disinfecting services and offers risk management advice on insurance provisions
specific to coronavirus cleaning services.
Although the COVID-19 report was written for use by firms in the cleaning
and disinfecting business, the stakeholders in a property should also be
familiar with the advice the best cleaning firms are using. It is better for
all parties involved with a cleaning services contract to have a clear
understanding of what the cleaning and disinfecting services entail and how
risk should be rationally allocated between the contractors and their
customers. The best contractors will be adhering to the advice in the COVID-19
report. A contractor deviating from its recommendations or a site owner
pressuring a contractor to deviate from the report is undermining the legally
defensible cleaning and disinfecting protocols the report was designed to
deliver.
Procuring Coronavirus Cleaning and Disinfecting
Services
The cleaning and restoration industry provides a wide range of services—from
fire damage restoration to mold remediation to traditional janitorial
operations. Many cleaning and restoration firms and a wide variety of startup
companies are now offering virus decontamination services. Not all of these
service providers are insurable.
A qualified and insurable COVID-19 cleaning services contractor will have
training and prior experience in biohazard decontamination services and will
possess the correct equipment, including personal protective equipment, to
conduct these operations in a safe and effective method. The firm will have
employees trained up to the state-of-the-art virus decontamination protocols,
and the project supervisors and field technicians will know how to use the
Environmental Protection Agency (EPA) approved cleaning and disinfecting
products to effectively perform this type of work.
One of the challenges faced by the stakeholders in a commercial property is
how to evaluate if a virus cleaning and disinfecting services vendor has the
above attributes. One way to do that is to let an independent, credible
third-party figure it out. Because there are no credible organizations that can
certify proficiency in virus decontamination services, the other way to
off-load the evaluation of due diligence is to rely on the investigative work
of an insurance underwriter. Informed insurance underwriters offering an
affirmative coverage grant for virus or biohazard decontamination services will
be concerned about all of the above attributes of an ideally insurable
applicant for insurance.
Since insurance underwriters risk a lot (the limit of liability) for a
little (the premium), they are not likely to sell meaningful liability coverage
to a firm that does not display these characteristics. Therefore, if a
contractor is insured specifically for coronavirus cleaning and disinfecting
services, that should be a very important selection criteria for the
stakeholders in commercial properties.
Affirmative coverage for biohazard cleaning and disinfecting services is
available and affordable to well-qualified firms from multiple sellers of CPL
insurance. In general, today, the rates for coronavirus decontamination
services are running about 20 percent higher than a traditional fire and water
restoration services vendor. Some sellers of CPL do not charge an additional
premium for the mortality risk of COVID-19.
Scope of Work
The goal of biohazard cleaning services is easy to define—the removal of
viral particles and other biological materials from surfaces. The challenge
lies in the inability to immediately identify whether a surface has been
effectively "cleaned" since viral particles are invisible to the
naked eye, and there is no real-time mechanical method to detect their presence
in a building. As a result, cleaning contractors cannot guarantee that their
efforts are 100 percent successful unless the job site is sequestered and
extensively sampled at great expense after work completion—an impractical
scenario.
And, it is with that understanding that owners and contractors need to agree
on the realistic expected outcomes of the decontamination services work. An
owner/manager cannot expect a contractor to "clean and disinfect" the
project area; rather, the contractor should only be expected to "wipe
surfaces" and "apply a disinfectant." A wise contractor will not
guarantee that a property will be virus-free upon completing the work because
it is impossible to know if the property is, or is not, virus-free at the
completion of the job.
What about Electrostatic Misting?
The consensus in the group of experts that drafted the COVID-19 report is
that effective cleaning involves wiping down touch points. The optional
application of disinfectants enhances the cleanliness but does not replace the
need for mechanical removal of the materials by wiping.
One of the first virus decontamination services to emerge to address the
COVID-19 pandemic was to apply an electrostatic spray of various chemicals onto
spaces occupied by humans. One vendor of these services left signage behind for
the occupants of the building that said the cleaning service had
"vaporized" any virus that was in the building, and therefore, the
occupants of the restaurant, in this case, could feel safe and secure. There is
a lot of marketing hype and puffery in that message.
The good news on the sprays is when an EPA-approved cleaning product that is
labeled to be effective on the SARS virus is applied with sufficient wet dwell
time to a surface that has had the surface dirt grime removed by manual wiping,
the sprays do give an extra amount of performance to the cleaning activity. Some
sprayed-on materials have residuals that have been proven in the lab to inhibit
the growth of mold and bacteria over set time periods, but little testing has
been done on their effect on the coronavirus. Spraying a disinfectant alone is
not considered by the experts that I know to be sufficient cleaning to
eliminate the virus transmission hazard in a building.
Some cleaning services vendors claim that an application of a spray will
sanitize a property and make it virus free for 30–100 days due to the residual
in the spray. Those claims are likely unfounded in science. Such a statement
overlooks the possibility of recontamination by the next virus carrier into the
building.
To put things into perspective on electrostatic sprays, I like this analogy
offered by an author of the COVID-19 report, "If I told you that I had a
magic concoction, and if you misted yourself with it for 20 seconds, you will
not need to take a shower in 30 days. What is wrong with that picture?"
The same author referred to the spray-only methods of virus cleaning as
"Spray and Pray." Property stakeholders following the advice in the
COVID-19 report should hire and pay for firms that clean touch points first and
then apply disinfectant. Praying would be optional.
Insurance Requirements as a Risk Management Tool
If property owners require meaningful liability insurance from the vendors
of cleaning services, two things can be accomplished. First, only qualified
firms are able to purchase CPL with added coverage for virus or biohazard
cleaning and disinfecting services. Second, there can be an element of risk
transfer onto the contractor who is insured for what they do for a living.
Because of the virtually universal addition of communicable disease
exclusions and virus exclusions in all property and liability policies renewing
in 2020, insurance on the virus decontamination services vendor is likely to be
the only insurance to apply to a third-party claim arising from COVID-19.
Although that insurance on the vendors will not protect the stakeholders in the
property, some insurance for a loss is better than none. Site owners will
benefit from the claims expertise of the contractors' insurance company in
establishing a joint defense of codefendants.
Today, the options for a property owner to purchase insurance for COVID-19
loss exposures are extremely limited to nonexistent. It is like trying to buy
windstorm coverage in Florida the day before the hurricane comes onshore. Those
needed insurance products are on the drawing board still.
In the COVID-19 pandemic, it will not be business as usual for contractual
risk transfer to a services vendor. The cleaning firms following the COVID-19
report recommendations will not agree to indemnify a property owner for losses
arising from COVID-19. Also, the contractor usually cannot make the property
owner an additional insured for the COVID-19 risk on the contractor's CPL
policy, either.
The insurance companies selling CPL policies that have been specifically
endorsed to address COVID-19 loss exposures will not allow a contractor to
become the insurer of last resort for the uninsured COVID-19 loss exposures of
the property owner. This is because the contractors have no control over the
COVID-19 risk at any point in their operations. In reality, no one knows if the
coronavirus is present or not before and after a cleaning project. And, as soon
as the contractor leaves the premises, the next human to enter the property can
contaminate it.
However, cleaning contractors have meaningful insurance coverage available
if the firm has the following.
- Past experience in biohazard cleaning
- Confirmed third-party staff training in biohazard cleaning
- Updated proficiency in the protocols recommended in the COVID-19
report
- Contracts that set realistic expectations on the efficacy of the cleaning
and have rational indemnity provisions for the services vendor
The insurance marketplace is very tight for contractors performing
coronavirus cleaning and disinfecting services. Applicants for the coverage run
the gauntlet in the insurance underwriting process to prove the firm's
insurability.
Coverage for COVID-19 Losses in Traditional
Insurance Policies
Traditional commercial insurance is ill-equipped to deal with COVID-19.
While "viruses" are not specifically included in the Insurance
Services Office, Inc. (ISO), commercial general liability (CGL) insurance
policy's pollution exclusion, it has been common practice since the Ebola
virus outbreak in 2014 for underwriters to add the Communicable Disease
Exclusion (CG 21 32 05 09) endorsement to new policies and renewals. The
communicable disease exclusion does include virus as a specifically
excluded cause of loss.
It is now common to see exclusions for virus-related losses added by
endorsement onto property coverages as well. In addition, as of this writing,
virtually all environmental impairment liability policies being issued today
covering virus as a defined "pollutant" contain a communicable
disease exclusion.
A CPL policy without an affirmative coverage grant for virus or
biohazard decontamination services will usually have the following coverage
problems for losses arising from COVID-19.
- No one knows if a virus fits within the ISO standard definition of a
"pollutant" or not. Policies naming virus as a defined
"pollutant" only partially clarify the expected coverage in a CPL
policy because the "material change in the risk" potential argument
to deny a COVID-19-related loss is not addressed.
- If a firm engages in offering virus cleaning and disinfecting services,
is that materially different from the other work the firm may have performed
in the past? Insurers can deny claims based on a material change in the risk.
It is important to note that it is the insurance company that will make the
decision on whether the risk materially changed from what the underwriters
thought they were insuring. The opinions of the contractor and the insurance
agent on what is material do not matter.
To avoid coverage disputes with CPL underwriters, it is important that
COVID-19 service providers purchase a specific coverage endorsement for
biohazard work that includes virus as a covered "pollutant" and
somewhere in the policy or endorsement include language affirming that the
underwriter is aware that the insured is in the virus cleaning services
business. That combination would constitute an affirmative grant of coverage,
as referenced in the COVID-19 report.
Some CPL and customized policies combining CGL and CPL policies that are
sold to restoration contractors incorporate a communicable disease exclusion
into the base policy form. These policies are not good for firms performing any
virus decontamination services.
Choosing the Right Virus Cleaning and
Disinfecting Vendor
To sum it up, there are some key points to practice when selecting a
contractor for COVID-19 services.
- Qualifications and experience. The vendor must have the
following.
- Personnel specifically trained in biohazard work
- The resources to adequately perform the work including the needed health
and safety equipment
- A defined scope of work
- COVID-19 services, like the virus, are novel. A clear scope of work
should detail all actions taken toward cleaning and disinfecting.
- Be wary of any vendor promising a virus-free building at the completion
of the work. Such a promise, since it cannot be reliably verified, puts a
cloud of suspicion over the efficacy of all of their services, in my
opinion.
- Fair contracts
- The stakeholders in a property should not expect the cleaning services
vendor to assume the COVID-19 risk of the building in the form of an
indemnity agreement or by being an additional insured on the contractor's
CPL policy for COVID-19-related losses. Contractors agreeing to such
indemnities can make themselves uninsurable.
- Proper insurance
- Besides insurance for typical hazards (e.g., automobile, general
liability, or workers compensation), a qualified vendor must have CPL
insurance. And the CPL insurer must acknowledge that it affirmatively covers
biohazard or virus cleaning services within the policy or by endorsement. An
insurance agent's or broker's representation of "Oh, you are
covered" is not sufficient. No matter what the policy says a covered
pollutant might be, the potential for a denied claim over a material change
in the risk needs to be taken off the table. That is accomplished with the
affirmative coverage grant.
- Requiring the proper insurance from coronavirus cleaning services vendors
can eliminate the need to perform extensive vetting of the service providers.
If a firm has CPL insurance with an affirmative grant of coverage for
biohazards including virus as a covered "pollutant," the insurance
underwriter has already done the vetting work before they agreed to insure
the vendor.
A Sample CPL Insurance Specification for
a Procurement Contract
Contractors Pollution Liability Insurance
Providing coverage in an Insuring Agreement for Bodily Injury, Property
Damage, Clean-up costs and Defense costs, arising from the escape dispersal or
release of pollutants arising from the contractor's operations and
completed operations. The policy shall be endorsed to affirmatively state that
virus or biohazard cleaning and disinfecting services are covered services.
The endorsement affirming coverage for these services shall be attached to
the certificate of insurance.
Amendments to the pollution exclusion in a General Liability insurance
policy do not fulfill this requirement.
Conclusion
The coronavirus will be with us for many more months. The risks associated
with this invisible killer will fundamentally change the commercial cleaning
business and create a new normal. Any cleaning project can be a biohazard
decontamination project because the presence of the virus cannot be detected.
Biohazard risks require specially adapted risk management protocols, including
changes in cleaning services procurement contracts and insurance coverages. In
selecting cleaning services vendors, an insurance requirement for CPL insurance
with an affirmative coverage grant for virus decontamination services will
reveal the firms that are insurable and the firms that are uninsured, or worse,
uninsurable.
Acknowledgment
I would like to thank Brady Maurer, JD, CPCU, of ARMR for his
contributions to this Expert Commentary.
Conflict of Interest Disclosure
The authors are specialized environmental
insurance architects and brokers and sell environmental insurance.