Emerging Hazards- An Insurer’s perspective

1. Emerging Hazards- An Insurer’s perspective Phil O’Neill, MS, CIH CSP, CHMM Chubb Loss Control March 19, 2014

2. Please Note the fine print This presentation is for informational purposes only and has an edition date of March 20, 2014. This presentation is necessarily general in content and intended to provide an overview of certain aspects of Emerging Hazards. No liability is assumed by reason of the information this document contains. Chubb refers to the insurers of the Chubb Group of Insurance Companies. Coverage may not be available in all jurisdictions. This presentation is the property of Chubb. Any use of this presentations without Chubb’s prior, written consent is prohibited.

3. Welcome

4. Emerging Hazards- definition • Long tail latent risks • Unknown, known, or developing risks that cannot yet be quantified • Substantial number of plaintiffs • Substantial number of policyholders • Impacts coverage over many years • Litigation driven by changes in: • Economic, financial, legal, political, scientific, socio-cultural & technological

5. EmeEmerging Hazrdsrging Hazards: Examples • Silica • Cellular/Mobile Telephones/Wireless Technology • Lithium Ion Batteries • Bedbugs • Welding Rods/Manganese • Nanomaterial • Diacetyl

6. Emerging Hazard? • Silicosis- one of the oldest known Occupational Diseases. • Hippocrates & Pliny the Elder wrote about- B.C. • 1938 Movie- “The Citadel”- sub plot –silica • 1949 US Supreme Court Decision Urie v. Thompson- Silica- Stature of Limitations

7. Silica Found in Minerals and Sand and Their Products

8. Sand • Sand is 95% silica (SiO2) • Common raw material in many operations • Presents exposure when particles are very small; respirable size • Screening, milling and mixing can generate small particles • Baking or heating makes sand particles “friable” such that respirable particles break off

9. Sand Consumption • 38% glassmaking • 22% foundries • 4.8% abrasives • 4.8% oil and gas (fracturing) • 7.2% building products • Silicon carbide • Ceramics

10. Silica • Crystalline form is most hazardous • Atoms form regular crystal shape. • Found in most rocks • Quartz most common form • Cristobalite and tridymite most hazardous forms • Tripoli

12. Routes of Exposure • Inhalation • Ingestion • Cutaneous (skin)

13. Bronchial tubes (Gray’s Anatomy)

14. Primary Silica Exposure Industries • Mining, quarrying and tunneling • Mineral products manufacturing; crushing grinding, cutting, milling and bagging • Sandblasting • Foundries • Glass manufacturing • Cement manufacturing • Pottery and masonry products manufacturing

15. Foundries • Sand used in mold manufacturing presents silica exposures; shakeout • Friable • Recycling of sand • Grinding residual sand • Past exposures

16. Quarries

17. Silicosis • Annually in U. S. • 250 workers die • 1 million workers exposed . • Globally • 10’s of thousands of deaths • Hundreds of thousands of workers exposed each year • Third World countries • Lack silica controls • Higher rate of death and disease

18. Judge Jack’s –In RE Silica Products Liability Litigation • Plaintiff Class Action suit- Changed from Mississippi to Federal district Court Corpus Christi • Lumped numerous separate suits • # of Silica claims- • 76 in 2001 • 10,642 in 2002 in Mississippi • Two doctors made diagnosis- on 90+% of claims.

19. Judge Jack’s Decision • Let defense gather information on the basis of each claim • Defense kept a database • Many claimants also filed Asbestos claims • Questioned a Dr. Martindale- diagnosed > 3600+ with silicosis. • Never examined the patients. • Conclusion- Silicosis was a manufactured legal epidemic.

20. Silica Controls • Substitution • Wet methods and dust suppression systems • Ventilation • Enclosure of transport areas, conveyors and sand recycling systems • Good housekeeping and HEPA vacuum use • Respiratory protection

21. Silica Exposure Reduction Initiatives • U. S. OSHA Special Silica Emphasis Program • Goal to reduce allowable silica exposures in the workplace by at least 50% • Critical need for more accurate lab analysis methods • World Health Organization • Global Silicosis Elimination Program

22. Primary Silica Exposure Products Industries • Powdered mineral and sand products • Talcum powders • Clay and ceramics arts and crafts supplies, chippers, grinders, kilns, sandblast tools • Agricultural chemicals • Joint compounds • Silica containing abrasives

23. Primary Silica Exposure Products Industries (continued) • Sweeping compounds • Dental materials and tools • Tools that cut, grind, and polish stone or masonry • Respirators and personal protective equipment that were intended to protect workers from silica exposure

24. Primary Silica Exposure Products Industries (continued) • Warnings must be provided on silica containing products • Where normal use or misuse, exposure may arise • Warnings must be provided on other categories of severe exposure • Machinery that generates high quantities of silica dust

25. Products Liability Exposures and Controls • Severe exposure for products likely to be associated with conditions where workers are exposed to crystalline silica in excess of regulatory standards

26. Products Liability Litigation Targets • Industrial sand manufacturers, distributors and suppliers • Respirator manufacturers • Kiln designers and manufacturers • U. S. and Australia - greatest activity

27. Product Warnings • Product exposures minimally controlled with adequate warnings • U. S. National Institute for Occupational Safety and Health (NIOSH) promoted a lower regulatory standard than existed for many years • Raised in failure to warn cases

28. Silica Product MSDSs/Labels • Silica type and content must be noted • Similar to asbestos • MSDS must contain carcinogen warning • Details on exposure and controls • CA Proposition 65 warning labels

29. Welding Rod Liability

30. Personal Injury Litigation Manufacturers of Welding Rods and Welding Equipment • Related to manganese exposure from welding rod fumes • Foundation of suits • Exposure to manganese in mining associated with Manganism • Similar to Parkinson’s disease

31. Welding rods • Suits claim link between welding rod fumes and Manganism and Parkinson’s Disease • No proven scientific causation re: Parkinson’s • Large and growing claimant pool

32. Allegations • Metal toxicity • Defective product and breach of warranty • Failure to warn • Misrepresentation • Negligence • Wrongful death • Survival actions • Loss of consortium

33. Welding Rods Warning Label History • Pre -1967 -- Generally no warning labels • 1967 - mid ‘90’s -- general note of caution to use adequate ventilation. Often found on bottom of box. Allegation of not enough detail re: potential dangers: CAUTION: Welding may produce fumes and gases hazardous to health. Avoid breathing these fumes and gas. Use adequate ventilation. • Mid-90’s -- New label specifically addresses manganese poisoning and how to avoid it. Plaintiffs attorneys claim it is too small.

34. Warning and Instructions • Lincoln Electric’s Precaution Summary on Welding Safety • Use ventilation or exhaust to keep air breathing zone clear, comfortable. Use helmet and positioning of head to minimize fume in breathing zone. Read warnings on electrode container and material safety data sheets (MSDS) for electrode. Provide additional ventilation / exhaust where special ventilation requirements exist. Use special care when welding in a confined area. Do not weld unless ventilation is adequate. • MSDS:http://content.lincolnelectric.com/pdfs/products/msds/uscw102.pdf

35. Welding Rod Litigation Defendants • Welding rod manufacturers • 200 in the US • Welding product manufacturers and distributors • Welding equipment manufacturers and distributors • Trade Associations and Industry Advocacy Groups

36. Potential Welding Rod Defendants • 300,000 US retired welders • 800,000 US active welders • 3,500,000 welders worldwide • At least 25 law firms pursuing class action lawsuits against welding rod manufacturers • One attorney medically screened 10,000 welders and identified 5 - 10% with neurological disorder • Extrapolation of pool to 35,000 - 70,000 workers • HSBC investment bank study

37. History of Litigation • Welding rod suits/claims - 30+ year submission history • Welding rod manufacturers • Welding industry trade organizations • Allegations that they rejected precautionary labels and misrepresented hazards (target:National Electric Manufacturer’s Association)

38. 1980’s - Present • 1985, 4 welders settle suit for manganese poisoning for $6.5 million dollars against Pennusco Cement and Aggregate, a division of Maule Industries as well as various rod manufacturers • Welding rod industry successful in 8 defense verdicts in litigation beginning in 1992. • October 28, 2003 Madison County, Illinois jury awarded $1,000,000 to welder Larry Elam against 3 defendants.

39. Alleged Injury • Manganese component exposure; Manganism • No scientifically proven causation re: Parkinson’s • Parkinson’s disease • Neurological brain disorder degenerates the part of the brain that controls movement • Tremor, unstable balance, stiff and slow movement

40. Welding • Manganism - manganese exposure • Parkinson’s like; different area of brain affected • Slightly different disease symptoms • Doesn’t respond to dopamine • Irreversible once clinical symptoms evident • Detailed testing show speed, motor skills and memory problems before neurological symptoms show up • Possibly effects delayed until aging, combining with normal neuron aging

41. Parkinson’s Disease Statistics • Affects .4% of people > 40 • 1% of people > 65 • Dr. Nausieda, expert neurologist in Elam case, claimed that his unpublished research found rates of 12.5% Parkinson’s incidence in a study of 20,000 welders • Research not yet corroborated

42. Exposure Dispute • Welding fume exposure level • High enough to cause disease? • High level manganese exposure toxicity from other operations, ex. mining, accepted

43. Exposure Duration for Disease Development • Usually associated with career welders with many years of exposure • Can occur after several years of high exposure

44. Who can be brought into a products liability action? • “Anyone responsible for introducing a product into the stream of commerce.” • Industry Associations -- developed standards • Distributors -- … had knowledge or reason to know of the dangers associated with the allegedly defective product … had reason to know of general welding fume dangers given it ….conveyed knowledge about such dangers provided safety training • Manufacturers -- Defendants include British, Japanese and US companies

45. Product Safety Hierarchy 1) Design out the hazard 2) Design in injury-limiting devices 3) Alter user behavior with adequate warnings and instructions - identify the hazard - instruct on how to avoid the hazard - inform of consequences if worker fails to take appropriate avoidance actions - appropriate size and location Ref: ANSI Z535

46. Welding • Used by metalworkers to fabricate, maintain and repair parts and structures

47. Main Types of Welding • Oxyfuel gas welding • Heat is produced by burning combustible gas and oxygen • Common in maintenance and repair • Arc welding • Common production welding - concentrated heated source

48. Welding Rod Metals • Several or many metals; Iron, manganese, copper, molybdenum, aluminum, chromium, nickel, magnesium, titanium, cobalt, tungsten, tin, beryllium, cadmium, lead, vanadium, zinc • Silicon

49. Manganese Exposure Standards • OSHA air contaminant ceiling - 5 mg/m3 • Some OSHA states lower • Outdated • National Institute of Occupational Safety and Health standard - 1 mg/m3 • ACGIH standard - .2 mg/m3 • 25 X lower than OSHA

50. Welding • World Health Organization - .3 mg/m3 • Workers are allowed to be exposed at OSHA levels which current research suggest may be too high • Even workers exposed below ACGIH levels are part of litigation