Knowledge is Safety

Canadian claims professionals familiar with the construction and damage restoration industries are also aware of the high level of risk associated with these industries and the pre-eminent importance of robust health and safety protocols to reduce those risks for everyone involved. In our multidisciplinary remediation practice, most of our construction and damage restoration files involve risk mitigation related to asbestos and lead—referred to as ‘designated substances’ in Ontario and ‘hazardous materials’ in all other Canadian provinces and territories. In our experience, Canadian claims professionals generally demonstrate a clear-eyed respect for the health and safety hazards posed by these harmful substances. Surprisingly then, we continue to see remediation files that involve asbestos and lead spills, the involvement of public adjustors, and civil litigation due to worker exposure. This led us to a question: in an industry so safety and risk conscious, how do mistakes and missteps related to designated substances/hazardous materials continue to happen?

In search of answers, we surveyed more than 90 property claims professionals working across Canada to gauge the frequency with which their claims involve designated substances, as well as their level of knowledge about these substances and the relevant safety regulations by which they are governed.

The results showed that 43 percent of claims professionals ‘often’ or ‘always’ handle property claims that involve a designated substances/hazardous materials report, 45 percent ‘sometimes’ handle property claims involving a designated substances/hazardous materials report, and 11 percent ‘never’ handle claims involving a designated substances/hazardous materials report. We chose to exclude from our study further responses from the ‘never’ group to avoid skewing the data regarding industry knowledge in this area. However, the size of the ‘never’ group is notable (11 percent), given the prevalence of designated substances/hazardous materials in claims involving property damage and restoration.

In terms of general knowledge about designated substances/hazardous materials, 56 percent of the participants characterized themselves as ‘very aware,’ 43 percent as ‘moderately aware,’ and 1 percent as ‘not aware.’

Where we began to gain some insight into our question was in the results related to familiarity with the relevant provincial/territorial regulations and guidelines, for example, Ontario Regulation 490/09 and WorkSafeBC’s OHS Regulations. While approximately 77 percent of participants indicated they were moderately familiar and 11 percent were very familiar with these regulations, 12 percent of those surveyed indicated they were ‘not familiar at all’ with these essential regulations and guidelines. This result surprised us and revealed a critical gap due to the legal responsibilities of claims professionals who deal with designated substances/hazardous materials under these same regulations.

For example, Ontario’s Occupational Health and Safety Act (the ‘OHSA’) defines ‘Owner’ as a “trustee, receiver, mortgagee in possession, tenant, lessee, or occupier of any lands or premises used or to be used as a workplace, and a person who acts for or on behalf of an owner as an agent.” This means that an insurer or claims professionals may become the legal ‘owner’ of a workplace following a loss.

Further, the OHSA requires project owners to “determine whether any designated substances are present at the project site” and to “ensure that a prospective constructor” is aware of the designated substances hazard “before entering into a binding contract with the constructor.” Similarly, constructors have a responsibility to inform contractors and subcontractors of designated substances at the project workplace, and these employers have a responsibility to inform their workers of the hazards. Workers have the right to be notified of hazards in every workplace and on every project, and it is ultimately the responsibility of the project ‘owner’ to confirm the presence or absence of designated substances. In short, insurers and claims professionals are often legally responsible for identification of designated substances/hazardous materials, such as asbestos and lead, after a loss requiring property damage restoration.

With this in mind, if 12 percent of claims professionals are unfamiliar with the regulations, they are likely also unfamiliar with their responsibilities under those regulations. If these responsibilities are not fulfilled, hazardous spills and exposures may occur, and legal action may be initiated. While it is possible that this 12 percent of participants are newer to the industry, a project owner’s lack of experience does not shield them from their responsibilities under the law, nor is it a legitimate excuse when a spill or exposure occurs.

Another insight gained through our survey results relates to the use of qualified experts on losses involving hazardous substances/designated materials. While 86 percent of participants reported relying on qualified experts to assess the presence of these substances, 11 percent of participants reported relying on contractors. While remediation/abatement contractors are well-versed in the removal and disposal of building materials that contain designated/hazardous substances, they may not be familiar with sampling and testing protocols and guidelines. In fact, some provinces (BC and Alberta, for example) mandate that samples be collected by a ‘qualified’ or ‘competent person.’ According to OHSA, a competent person is defined as someone with knowledge, training, and experience with the management and control of these substances, who is familiar with the associated hazards, legislation, and guidelines. Such competent persons include certified industrial hygienists, safety professionals, engineers, and people with extensive occupational health and safety experience in the abatement and remediation industry. Generally, these are unbiased third parties, engaged by project owners to complete all necessary sampling and testing.

When it comes to engaging a competent person to assess and report designated substances/hazardous materials on a loss site, our survey found that while 80 percent of respondents engage such an expert to assess and report, 16 percent sometimes or never engage a competent expert, and approximately 4 percent could not answer this question. That’s 20 percent of respondents who rarely or never engage an expert assessor and who, based on the previous discussion, may not understand why engaging such an expert is necessary. The reason, again, is responsibility under provincial health and safety regulations. When a claims professional takes control of a site, they take on responsibility for engaging a competent person to assess and report on designated substances/hazardous materials.

Once again, we looked at whether years of experience could explain this knowledge gap, and again, we were surprised. Of the 27 percent of respondents who said they were not aware of their responsibility to engage a competent assessor, 73 percent had over 10 years’ experience in the insurance industry, 14 percent had 6 to 10 years’, and 14 percent had less than 5 years’. Any illusion that this critical knowledge gap is inevitably bridged over time, does not bear out in our results.

Through an optimist’s lens, you might say our survey revealed that most Canadian claims professionals have a satisfactory level of knowledge about designated substances/hazardous materials and their legal responsibilities under the applicable provincial health and safety regulations. But in an industry in which the risk of serious workplace injury is so high, can ‘most’ be considered good enough? Anyone working in the construction and damage restoration industries will tell you that one incident or injury is one too many. And as with all incidents, we believe that those related to worker exposure to designated substances/hazardous materials are avoidable. By ensuring all claims professionals are armed with knowledge of provincial health and safety regulations and guidelines, as well as their statutory responsibilities under these directives, we can make worksites safer and reduce risk for everyone involved.