Author: VU Faculty
While it's an unpleasant topic to consider, sometimes people pass away in their homes and their bodies are undiscovered for weeks. Decomposition can lead to decay and loss of body fluids. Similarly, the clean-up costs for firearms-related suicides can cost thousands of dollars. Are these clean-up and removal expenses covered by homeowners policies or is coverage removed via the pollution exclusion?
Here are three recent questions received by our "Ask an Expert" service:
"My insured had a tenant die in one of his units. The body went undiscovered for a few weeks and there was a good deal of decomposition of the body. Some of the bodily secretions were absorbed into the floor and a specialized firm was called in to clean up the apartment at a cost of $6,000. The insurer has denied coverage under the pollution and "fungus" exclusions. I know of another company that has paid this type of claim but am looking for ammunition to argue for coverage with this insurer."
"We had a property claim where a person died in an apartment and decomposed a bit before discovery, causing property damage to the rental unit. In the past, they had had a suicide and the carrier covered the loss. Our carrier is citing a biological pollution exclusion in their policy as a reason to deny the claim. I maintain that the damage is water (fluid) damage and we are at odds. Exclusions exist for a purpose, does anyone know what this particular exclusion was designed to address? I'm sorry I do not have the form number. Also, would there be coverage under an HO tenants form?"
"A MA agent had a problem where a client died...and unfortunately wasn't discovered immediately (10 days had elapsed). The person started to decompose on the wall-to-wall carpeting. The agent called the insurer asking if the restoration/cleanup vendor could begin work. The bodily fluids kind of create a 'biohazard' mess. The client wanted an answer before work began. The company adjuster said 'go ahead.' Of course that adjuster now has a 'memory lapse' and claims he never authorized the cleanup.
"The company wants to deny this HO-3 claim under the 'pollution' exclusion. After some argument by the agent who said he had called to get permission, the insurer states they are 'making an accommodation' but that it isn't really covered. Number one...it appears they 'waived' their right to deny the claim by giving the go-ahead. There was no reservation of rights letter.
"Number two...do you have any ammunition of court cases regarding this supposed 'pollution' claim? I remember years ago one of my Maine agents had such a problem...but that was when the policy excluded 'contamination'...and with some discussion they decided that the intent of the exclusion was not for this type of loss.
"I don't believe the intent of the pollution exclusion is for this type of loss. Can you lend some specific examples should this happen again? I told the agent to take the accommodation...then a precedent is set for future situations anyway! But, a more specific example for future reference would be helpful."
Although you'd think this has been litigated before, under either homeowners or commercial property (or BOP) policies, I couldn't find any readily available court cases, at least using the search terms I tried. I ran this by the VU faculty and their divergent responses are provided below.
I don't have a court case to cite, but this is the kind of nonsense that ends up in court. I saw a recent case on something similar, where the company tried to stretch the pollution exclusion, and the court said it had to be in some sort of environmental context to apply. Some jurisdictions look at the exclusion as being limited to such environmental contamination due to chemical or other man-made pollutants.
How would blood and body fluids/solids related to a murder of a tenant be treated? Does a corpse meet the definition of a pollutant? These are legal questions that probably require the opinion and resources of an attorney familiar with state or federal case law in your jurisdiction.
Whether this is a "pollution" claim or not depends on case law in your area. Keep in mind that the "pollution" exclusion only appears in the "open perils" forms such as an HO-3, HO-5, or commercial Special Causes of Loss forms. An unendorsed HO-4 tenants form doesn't have this exclusion but would only respond if the damage arises from a covered peril. I recall a court case, but can't give you the citation, where coverage was found under a named perils form in a shotgun suicide...the court cited the "explosion" peril as the proximate cause of the loss. For a natural death, there is probably no named perils coverage and you're at the mercy of pollution case law for open perils coverage.
This is a serious problem. The mess left by a rotting corpse is gruesome. The cost to clean up a building following an incident where a corpse remains undiscovered for an extended period of time can be thousands of dollars. In major cities, there are firms who contract to clean up these sites and they charge their substantial fees in advance. The task can be an awful job, so their fees are well deserved. Leaving the task for a family to clean up borders on cruel.
The situations often involve people with very limited means. The deceased are often elderly and poor. Their families are faced with funeral costs and cleanup costs, and have few resources for either.
The pollution exclusion in my homeowners policy includes:
Discharge, dispersal, seepage, migration, release or escape of pollutants unless the discharge, dispersal, seepage, migration, release or escape is itself caused by a peril insured against under coverage C (Personal Property perils) of this policy. Pollutants means any solid, liquid, gaseous, or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed except as provided by Section 1 - Additional Coverage 12. Spoilage or Residue Removal Coverage.
Now let us move to Additional Coverage 12. Spillage or Residue Removal Coverage:
"We will pay up to $5,000 for the removal of:
a. Substances accidentally spilled on; or
b. Residue covering
an interior building item insured under Coverage A - Dwelling or Coverage B - Other Structures.
This coverage includes, but is not limited to, the cleaning, correction, modification, removal, repair or renovation of the interior building item(s) altered, coated, covered or damaged by such spillage or residue.
This coverage is limited to interior building items. We do not cover any item located outside the exterior walls of the building or below the under surface of the lowest basement floor or, where there is no basement, below the surface of the ground inside the foundation walls.
We will not pay for spillage or residue removal if the spillage or residue was caused by a peril excluded or limited by this policy. However coverage exception C.7.e. under Section 1 - Coverage A. Dwelling and Coverage B - Other Structures perils insured against does not apply to this additional coverage.
I believe the Spillage or Residue Removal Coverage under this policy would pay for damage to the interior of a building caused by a corpse that was not discovered for an extended period of time. This is a "deluxe" HO policy, so the plain vanilla ISO form doesn't include this coverage.
An HO 3 Special Form is a named exclusions (open perils) policy. All losses unless specifically excluded, are covered. The pollution exclusion is for the discharge, etc. of pollutants. Dead bodies, although a biohazard, are not pollutants under the policy. I just checked HO 00 03 04 91, as it was the one that I had in this office, and biohazards are not listed, and as such should/would not be excluded in my opinion.
Also, I have had at least 4 DB cases, and all were covered for tearout and restoration on the HO 3.
I hate to say it, but the company is dead on this one...my argument would be this effectively eliminates any claims since they would have arisen from a "pollutant" - namely, the human being, who is, after all, composed completely of chemicals and waste.
I think you could say that decomposed flesh constitutes a "contaminant." However, I don't think, examining the historical background and development of the pollution exclusion in its various forms and policies, that the intent is to exclude something like this. In a number of jurisdictions, courts are clearly imposing an environmental pollution aspect to claims.
Here is the exclusion in the referenced form:
Discharge, dispersal, seepage, migration, release or escape of "pollutants" unless the discharge, dispersal, seepage, migration, release or escape is itself caused by any of the "specified causes of loss". But if the discharge, dispersal, seepage, migration, release or escape of "pollutants" results in a "specified cause of loss", we will pay for the loss or damage caused by that "specified cause of loss".
You'll have to have an attorney check case law applicable in your state to determine if this exclusion can be stretched to include non-environmental, "natural" pollution. If so, then you'd have to demonstrate that the pollution was caused by a Coverage C named peril in order to find coverage. Also, don't forget that most policies today have a mold/fungus exclusion that might apply.
A literal reading of the pollution exclusion would probably exclude contamination resulting from a natural death, though you'd have to look at case law with regard to this specific type of loss or the pollution exclusion in general. You also have to consider the nature of the contamination. Just biowaste could conceivably trigger the exclusion. But, even if not, you have to now consider the fungus/bacteria exclusion which will almost assuredly arise when a body has been decomposing for many days.
I don't think the intent is to exclude such a loss and I've heard of carriers paying them, but the pollution exclusion is conceivably broad enough to exclude this unless damage results from pollution arising from a "specified cause of loss." In addition, there is cleanup coverage in the CP 00 10 IF the pollution exists because of a "specified cause of loss":
Pollutant Clean Up And Removal
We will pay your expense to extract "pollutants" from land or water at the described premises if the discharge, dispersal, seepage, migration, release or escape of the "pollutants" is caused by or results from a Covered Cause of Loss that occurs during the policy period. The expenses will be paid only if they are reported to us in writing within 180 days of the date on which the Covered Cause of Loss occurs.
This Additional Coverage does not apply to costs to test for, monitor or assess the existence, concentration or effects of "pollutants". But we will pay for testing which is performed in the course of extracting the "pollutants" from the land or water.
The most we will pay under this Additional Coverage for each described premises is $10,000 for the sum of all covered expenses arising out of Covered Causes of Loss occurring during each separate 12 month period of this policy.
Click here for a case law update from Randy Maniloff.
Last Updated: May 22, 2014