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.
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.
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.
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.
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.
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.
Opinions expressed in Expert Commentary articles are those of the author and are not necessarily held by the author's employer or IRMI. Expert Commentary articles and other IRMI Online content do not purport to provide legal, accounting, or other professional advice or opinion. If such advice is needed, consult with your attorney, accountant, or other qualified adviser.