Guests staying at prominent hotels across the country contracted something they likely never suspected they would get during their stay, Legionnaires Disease. Guests were sickened, and some even died, due to exposure to the Legionella bacteria lurking in hotel water systems.

Pollution incidents like these result in lawsuits, investigation and remediation costs, business interruption and damaged reputations for hotels. They are likely losses that are not going to be covered under standard insurance lines, due to pollution exclusions.

Lodging is a segment within the hospitality industry, and can include properties such as resorts, hotels, motels and hostels. In addition to hosting travelers, they can also host events and conventions.

With all of the operations and services that are provided through lodging businesses, there are several potential pollution exposures that can put these properties at risk. Pollution risks for lodging properties can include:

• Mold exposure due to water intrusion in building materials, development in water systems, and improperly maintained or ventilated indoor pools, spas and water features.
• Hazardous chemicals stored and used on site, such as cleaning solvents, ammonia, pesticides and chlorine
• Other hazardous chemicals that can be used from onsite amenities such as dry cleaners and golf courses
• Legionella bacteria that can accumulate in water systems and disperse through mist and airborne droplets
• Releases from restaurant grease traps and liability for grease transport and disposal
• Leaks from onsite tanks that store fuel, oil and lubricants for equipment, generators and maintenance vehicles
• Lead-based paint and asbestos that could be in various building materials, especially in older buildings
• Disposal liability for generated wastes including fluorescent lighting, maintenance materials such as paints and used oil and lead-acid batteries from golf carts

The hospitality industry has been greatly impacted by the closures ordered due to the COVID-19 pandemic. Many properties were shut down or operating at substantially reduced use and capacity. These shutdowns have heightened many of the pollution exposures already faced by lodging properties. Consider the following:

• Buildings that have been shut down may experience decreased ventilation and increased humidity levels which can foster an environment for mold growth
• Reduced building maintenance can also allow leaks and water intrusion incidents to go undetected for longer periods of time, increasing mold exposure
• Legionella thrives in warm, stagnant standing water. Lodging facilities could be at higher risk for legionella growth in plumbing, HVAC, spas and other water systems if those systems have not been regularly run and properly maintained
• Metals, such as lead and copper, can enter drinking water in a building from corrosion of a building’s plumbing (pipes, fixtures). Corrosion may occur during long periods of low or no water use, leading to potentially high levels of lead or other metals in the building’s drinking water. [1]

Environmental Site Pollution Liability, also known as Environmental Impairment Liability and Premises Pollution Liability, can help businesses in the hospitality industry address pollution exposures. Coverage can include onsite and offsite cleanup and third-party bodily injury and property damage. Additional enhancements may include mold, legionella, business interruption from a pollution condition, first and third-party transportation pollution, non-owned disposal liability, storage tanks, crisis management and defense expense for third-party claims.

Due to the level of pollution risk that hospitality businesses can carry, obtaining desired coverage could face some challenges. UCPM’s brokers have the experience and market access to help negotiate the best offering.

With an environmental consulting firm on retainer, UCPM can also help agents deliver effective environmental risk management tools that can benefit hospitality businesses such as Operations & Maintenance (O&M) plans to address mold, legionella, asbestos and lead-based paint. This positions the agent to deliver an added value to their clients.

Hospitality is a big industry where reputation is critical. It’s important to be able to mitigate pollution risks and address incidents quickly and effectively. Having appropriate pollution coverage in place is a key piece in their overall risk management.