Canadian Underwriter
News

Pharmaceutical companies facing liability for products found in water supplies: Marsh


June 22, 2010   by Canadian Underwriter


Print this page Share

Pharmaceutical companies are facing an evolving risk of liability for pharmaceuticals and personal care products (PPCP) found in ground and drinking water supplies, according to Marsh.
PPCPs include antibiotics, anti-convulsants, mood stabilizers, stimulants and antihistamines.
“Liability will likely rest primarily with large sources that dispose of the PPCPs inappropriately (e.g. manufacturing and large end users) and those that have significant releases from operations or widespread usage,” the commercial insurance broker and risk advisor says in an online statement.
Marsh notes select insurance markets in the United States have expressed interest in an excess coverage program to address the risk of PPCPs in water supplies via products pollution coverage.
“Currently, the markets are able to commit to a solution and put something in place,” said Jim Vetter, managing director of Marsh’s environmental practice. “The good news is that carriers are willing to entertain covering pharmaceutical companies for the risk to individuals from drug residues in the water supply.”
Coverage would be on an excess basis, with a large retention (in the range of $10 million or more), the broker says. A primary layer of up to $50 million could be written on a commercial Pollution Legal Liability (PLL) Form or equivalent, which triggers on claims against the corporate legal entity.
Additional limits could be secured as necessary from other carriers. The policy term would be likely to be three to five years with an ability to renew.
“Key benefits and coverage would include bodily injury and toxic tort claims stemming from pharmaceuticals in ground water, associated defense costs and changes in legislation that may trigger this issue into an area involving cleanup or enforcement,” said Vetter.
He added coverage might also be triggered if legislation created “a regulatory basis for establishing a nexus between pharmaceuticals in ground water and potential human health effects.”
Marsh says the issue of PPCPs in ground water came to prominence in 2009, when the Associated Press reported that the drinking water of at least 51-million Americans contains a variety of drugs, including antibiotics, sedatives, sex hormones, and dozens of other drugs. Subsequently, congressional hearings were held.


Print this page Share

Related


Have your say:

Your email address will not be published. Required fields are marked *

*