What is Legionnaires’ disease and what are the implications of this for risk management and insurers?

Legionellosis is fast emerging as a serious liability risk for businesses and the public and is the topic of a new risk bulletin from AGCS and Praedicat which outlines possible risk exposures and the insurance implications.

What is legionellosis?

Legionellosis is a broad type of community‐acquired pneumonia caused by a pathogenic species of the Legionella bacteria. Legionella thrive in freshwater environments and pass through human‐made water filtration environments. One particular bacterial subtype of Legionella can cause Legionnaires’ disease (LD), a severe pneumonia with an average fatality rate of 5% to 10%.

Why is legionellosis an emerging liability risk?

Though outbreaks of legionellosis are rare relative to the frequency of exposure, the number of cases has quadrupled in the past 15 years. The US Centers for Disease Control and Prevention (CDC) estimates that 90% of all outbreaks would be preventable with more efficient water management, presenting an opportunity to reduce the number of future outbreaks.

Legionella is estimated to be present in approximately 50% of large building water systems and 10% to 30% of home water systems in the US. Despite the clinical consequences of LD, little progress has been made to date to appropriately define the burden of the disease, the factors that affect susceptibility, key sources of infection and the differences in the irulence of strains, due to the complicated lifecycle of Legionella and the problematic incidences of underdiagnoses and lack of understanding even among some in the healthcare industry. LD is not a reportable disease in some countries.

What are the main areas of exposure both today and in the future?

Legionellosis is most commonly associated in human‐made aquatic environments like hotel and hospital water systems, cooling towers and air conditioners, but new settings are frequently identified. The World Health Organization (WHO) estimates that about 20% of the legionellosis cases detected in Europe are travel‐related. Emerging exposure settings include garden hoses, dental unit waterlines, household water heaters, showerheads and even soil samples.

What can be done to mitigate legionellosis?

Because elimination of the Legionella bacteria is impossible, the key is to understand the conditions under which the bacteria can multiply and cause disease and treatments and measures to minimize its overgrowth. The aim is to control LD outbreaks, which depends on making a quick diagnosis, gathering supporting epidemiological data, identifying the source and implementing control measures for the careful management of human‐made water systems.

Some treatment solutions include maintaining water systems at constant high temperatures above 60°C, using filters and applying chemical treatments like monochloramine, a combination of chlorine and ammonia which is widely used as a drinking water disinfectant. Additional evidence suggests that filters, copper‐silver ionization and ultraviolet light are effective in reducing the bacteria in hospital environmental samples. Regulatory solutions have been slow to respond:

In the US, the American Society of Heating, Refrigerating and Air‐Conditioning Engineers (ASHRAE) has published new standards to prevent legionellosis, but it lacks the binding authority of national law. The US Occupational Safety and Health Administration (OSHA) addresses legionellosis control measures for building managers and occupants but is primarily aimed at educational awareness. The UK’s Health and Safety Executive (HSE) has issued regulations that address ater systems prevention for all businesses providing residential accommodation.

What are the insurance implications?

Exposure to Legionella is a global phenomenon that affects the risk profile of most commercial businesses. The industries mentioned previously are likely to have already identified the potential risks as part of their enterprise risk management (ERM) and considered how to finance mitigation, usually through insurance solutions. There are also significant risks of bodily injury to third parties, staff, third party property and the business’s property, such as contamination of structures and possible diminution in values.

Insurers offer public and products liability (PPL) insurance as well as environmental impairment liability (EIL) insurance, which can help pay for the defense in case there is a covered claim for which the business is not liable or can indemnify the business up to the agreed policy limit based on the scope of coverage. An insurer’s claims service also helps in negotiating an appropriate amount of indemnity with the claimant. Insurers can also assist in assessing a facility’s risk of Legionella exposure, developing site‐specific management plans, conducting risk characterization assessments and developing controls or measures to reduce the risk of legionellosis.

Download the complete version of the Emerging Liability Risks: Legionellosis bulletin at www.agcs.allianz.com/insights/.