Silica could be next asbestos: S&P

A new article by Standard & Poor’s addresses the issue of silica exposure and its potential impact on insurers.
“The parallels to asbestos are of concern to us,” says S&P credit analyst John Iten. He expects silica litigation growth could mirror that of asbestos in terms of its far-reaching scope and tail, noting that the number of potential claimants is “huge”.
Inhaled silica dust has been linked to silicosis, an incurable lung disease, and other serious illnesses including lung cancer. The latency period for such illnesses is 10 to 40 years.
At the same time, lawsuits are already expanding in scope, the S&P report notes, taking in silica manufacturers, industrial users, respirator manufacturers and retailers, much like asbestos suits. The Occupational Safety and Health Administration (OSHA) estimates as many as three million workers in the U.S. have been exposed.
A problem results as well in that silica is not banned, although OSHA set exposure limits in 1971. S&P concludes that companies’ responses to those limits will form a critical part of their defense of silica-based lawsuits. Some manufacturers have successfully used a “sophisticated user” defense, noting that employers should have known the dangers of silica and protected workers. In other cases, this defense has been rejected by the courts, although it remains to be seen how state appeals courts will react to pending cases.
Iten points to general liability or commercial umbrella carriers as facing exposures, and notes most insurers have not written silica exclusions into policies. However, some are reserving for exposures, with CNA recently noting increased silica lawsuits as part of its decision to boost mass tort reserves by US$81 million.