Asbestos and Condominium Associations

Asbestos is the name given to a group of fibrous minerals that occur naturally in the environment and has been used for a wide range of building materials, including roofing shingles, blown-on “popcorn ceilings,” as well as ceiling tiles and floor tiles.

Asbestos fibers are so small they cannot be seen. When these tiny fibers are disturbed, they float in the air and can be inhaled. Asbestos had long been recognized as a health threat to humans, because the fibers can be inhaled and are difficult to remove from the lungs. Asbestos can cause health problems when it is breathed into the lungs.

For instance, if the individual units within the development have popcorn ceilings or old (original) vinyl flooring, they may contain asbestos. A simple rule is the newer the development is, the less likely it has asbestos materials. Condominium associations with physical improvements built before the 1980s are likely to contain the mineral somewhere.

Commercial insurance policies purchased by the Board or Directors, particularly general liability, property insurance and Directors & Officers Liability policies often include specific exclusions relating to asbestos due to the significant health risks and associated liabilities. This includes exposure, contamination, cleanup costs, bodily injury, property damage, and legal defense expenses stemming from asbestos-related claims. For example:

“This policy will not apply to, and does not cover any, actual or alleged liability whatsoever for any claim or claims in respect of loss or losses directly or indirectly arising out of, resulting from or in consequence of, or in any way involving asbestos, or any materials containing asbestos in whatever form or quantity.”

There are, occasionally, very narrow exceptions to the asbestos exclusion. Even though asbestos is typically considered a pollutant under most commercial policies, coverage might nevertheless be provided if the property elements containing asbestos are unavoidably disturbed during the repairs associated with a “covered property claim.”

• The specific wording and scope of asbestos coverage (or exclusions) can vary significantly between policies and insurers. It’s crucial to carefully review your commercial insurance policies and consult an insurance expert to understand the extent of your coverage and any potential gaps.
• Condominium associations engaged in activities that may involve disturbing asbestos, such as construction or demolition, should ensure they have adequate insurance coverage, including potentially specialized Environmental Liability or Asbestos Abatement Liability policies.
• Condominium associations may consider requiring all contractors and subcontractors performing work on the Association premises, to provide evidence of an Environmental Liability or an Asbestos Abatement Liability policy – and to always make it a practice to have the Association added as an “additional insured” when the coverage is procured.

Since the Association doesn’t have a way of knowing how many other asbestos-exposed repair activities a given contractor or subcontractor may be engaged in (and how many other “insureds” may be sharing the same liability limits), the most conservative approach is for the Condominium Association to procure their own policy and limits in their own name.