Indoor Air Quality Disasters: How Liable Are You as an HVAC Professional?

Did you know that an HVAC contractor may be liable when an indoor air quality (IAQ) issue is directly linked to a defect in the air-conditoning, heating or ventilation system?

According to the U.S. Environmental Protection Agency, HVAC systems contribute to poor air quality through insufficient design and ventilation system deficiencies. Contaminant buildup in ventilation systems as well as improper temperature and humidity conditions are all causes.

A properly designed, installed, operated and maintained HVAC system distributes air adequately to remove odors, fumes and other indoor air contaminants.

The design of the ventilation system should address the size of the space as well as the number of occupants and any special uses. Facilities with higher amounts of emissions, such as laboratories, printing businesses or woodworking shops, require more extensive ventilation systems to expel the contamination source.

While some of the contaminants contributing to poor indoor air quality are found in products used within the operation processes of the facility, other contaminants may be introduced by the HVAC contractor.

Job site operations can disturb asbestos, lead and other contaminants. Materials used in the project may spill or leak during construction. Indoor pollution liability claims can result when a contractor is negligent in providing adequate controls for hazardous materials during construction or a renovation.

A contractor could be found responsible for air quality issues, particularly if the company failed to properly design/install the system, failed to provide appropriate drawings and obtain permits, used hazardous materials and installed the units in violation of local building codes.

Outdoor air entering a building, particularly from motor vehicle exhaust and other emissions, may affect indoor air quality. Circulating outside air through the HVAC system dilutes the indoor pollutants released by equipment, building materials, and other products.

A HVAC contractor may face liability if the pollutants are entering the building due to poorly located air intake vents or if the building is not receiving an adequate supply of outside air.

Ventilation systems must comply with the standards set by the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE). These standards, established in 1989, are voluntary standards (they’re only enforceable if the state or city adopts them into its building code) set to address minimum ventilation rates acceptable to people with the goal of minimizing adverse health effects.

The standards vary based on the type of operation, the building, the activities performed within the building, the equipment housed in the building and the occupancy. ASHRAE sets standards that specify the amount of outside air (cubic feet per minute) that must be brought into the building to maintain proper indoor air quality. When rooms in a building are used for purposes outside of the original design, the HVAC system may require modification.

Commercial General Liability (CGL) insurance can protect an HVAC contractor, but coverage does not always extend to air quality issues. Some insurers offer separate policies particularly for air quality and  professional liabilities.

According to Bill Pritchard, the President of Beacon Hill Associates Inc., an insurance broker specializing in environmental and contractors pollution liability insurance, CGL insurance does not usually cover pollution claims resulting from on-site plan modifications made by the contractor to make the sytem work and the actual design work performed. CGL insurance also does not cover the subcontractor’s work.

Contractors Pollution Liability (CPL) insurance is designed to protect an insured’s operations from third party claims relevant to damage from air quality issues. Professional liability insurance (PLI), also called errors and omissions (E&O), is a liability insurance that protects companies from bearing the costs of defending against negligence claims by clients.

Both policies bridge the gap between CGL coverage and professional liability exclusions. Because air quality issues and professional liability are generally excluded from CGL policies, it’s important for HVAC contractors to have comprehensive coverage that protects them fully from such potential claims.

Next Steps

Check out Controlling Mold: An HVAC Professional’s Guide in our learning center

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