The current water crisis in Flint, Mich., has brought thesubject of lead poisoning to the forefront of the news.

It began in April 2014 when Flint changed its water supply butdid not apply corrosion control treatment to the water, whichallowed the water to leach lead from the pipes and poison theresidents, particularly the children.

Along with lead in pipes, lead paint has been a known cause ofconcern for several decades. Rental dwellings often have leadissues. Because of this, the Jersey City, N.J., Insurance ServicesOffice has a few state-specific forms that either exclude orprovide minimal coverage.

Maine, Massachusetts and Maryland all have lead-relatedendorsements. This article focuses on the dwelling propertycoverages and exclusions for these three states, although there aresimilar endorsements for Homeowners' and Commercial properties. Thenature and coverages are similar.

It started with Ancient Rome

The widespread use of lead goes back to Roman times. In ancientRome lead was considered the father of all metals, used for avariety of items from dishes, pots and pans to face powders,rouges, mascaras, paints, a condiment for seasoning food,disguising inferior wine, and even as a spermicide.

The vast network of plumbing for which the Romans became famouswas constructed with lead pipes. Although aware that lead couldcause serious health problems, they minimized the hazards, notrealizing that long-term, limited exposure was still dangerous.Madness, sterility and dementia were common results of leadpoisoning.

In the early 20th century lead was used in paints for furniture,walls, cribs and other items. As early as 1904, an Australianphysician made the connection between lead paint and lead poisoningin children. It causes convulsions, encephalopathy, nervous systemdamage, delayed development and other illnesses, including death.It tastes sweet so children may put lead chips or toys with leaddust in their mouths.

By the early 1920s countries began banning the use of lead paintindoors, but the United States didn't ban it until 1978, leavingmany still exposed, especially in older houses. This is where theexclusions come in. Insured can't be liable to themselves forhaving lead paint in the home, but they are certainly liable totenants to provide a safe environment.

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Maine: DL 24 43 Lead Poisoning Exclusion

The Maine form, DL 24 43, Exclusions, Paragraph F. Coverage LPersonal Liability, Exclusion 7, is for bodily injury as a resultof lead poisoning. Because an insured may have inherited a home orjust decided to rent out an older home, the lead liabilityexclusion does not apply until 31 days after the Maine Departmentof Human Services or a lead inspector has given notice to theinsured or anyone managing the property that a lead hazard existsin the dwelling and that it needs to be removed, replaced, orsecurely covered up within 30 days of receipt of the notice.

This gives insureds time to address and correct a problem theydidn't know they had until the inspection. If the insured doesn'tfollow through on the requirements and correct the issue in thetime allowed, the exclusion is then in force.

Once the hazard has been removed or remediated, the exclusion nolonger applies. Any injury from lead poisoning would be covered,although it is highly unlikely to occur. The exclusion is nota mandatory form, but underwriting may require it on rentaldwellings of a certain age when lead exposure is possible.

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Maryland: DL 24 52 Coverage for Lead Liability

Maryland's form, DL 24 52 Coverage for Lead Liability, requiresthe insured to schedule the property that is to receive coveragefor lead liability. The endorsement is built around state statutesregulating lead exposure in residential property.

The form defines certain key terms that insureds and agents needto understand, including the following:

• Affected property is defined as:|
  • Rental property constructed before 1950 that contains not morethan one rental unit or not more than one for which an insuredmakes an election under the Maryland Environment Article subtitle,which has the purpose of reducing childhood lead poisoning whilemaintaining affordable rental housing, or
  • A rental dwelling unit constructed before 1950 that containsmore than one rental unit or a property with more than one rentaldwelling unit for which the insured makes an election under thestatute.
• Elevated blood lead must be in a “person atrisk,” that is, someone under 6 years of age, a pregnant woman, orsomeone who is not an insured who resides or is regularly at theaffected property for at least 24 hours per week. In order for leadexposure to be a serious hazard, exposure must be consistent over aperiod of time; someone exposed for less than 24 hours a week isnot thought to be exposed sufficiently to suffer adverseeffects.
• Relocation expenses include all expensesbrought on by the need to relocate the tenant's household tolead-safe housing of comparable size and quality. This includesmoving and hauling expenses, HEPA-vacuuming of all upholsteredfurniture owned by the tenant that was at the affected property,payment of a security deposit at the lead-safe housing, andinstallation and connection of utilities and appliances. If therelocation is temporary, then meal expenses are covered if the newlocation does not have preparation facilities, and the cost ofstoring furniture and other belongings is included as well.
• Rent subsidy is defined as the differencebetween the rent at the affected property and the rent at thelead-safe housing to which the tenant has been relocated. Theamount allowed is no more than 150% of the existing rent each monthand lasts until the at-risk person with an elevated blood levelreaches age 6, or the child born to a pregnant woman reaches age6.
• Rental dwelling unit is a room or group ofrooms forming a single independent habitable rental unit forpermanent occupation by one or more people. The unit has livingfacilities with permanent provisions for living, sleeping, eating,cooking and sanitation. This would be a standalone home rented toothers, for example.

Additional requirements in Maryland

Coverage is provided under very specific circumstances inMaryland. The insured or his agent must register the property withthe Department of the Environment, the property must pass the testfor lead-contaminated dust as set forth in statute, perform thelead hazard reduction treatments so that the property complies withthe standards set forth in statute, and obtain a copy of a verifiedreport from a lead paint inspector accredited by the Department ofthe Environment certifying that the property is in compliance withstatute. Once this has been completed then the carrier will pay theexpenses of a qualified offer made pursuant to statute. Allpayments will be made to the service provider other than those tobe paid to the “person at risk” or the child's parents or legalguardians.

Maryland cancellation and nonrenewal procedures

The final section adds specific cancellation and nonrenewalprocedures that apply to the endorsement coverage only; thestandard conditions apply to the rest of the property.

Cancellation or nonrenewal are allowed when the insured failsto:

• Pay premiums due.
• Perform lead hazard reduction treatment.
• Allow the carrier or its designee reasonable access to theproperty for inspection for the presence of lead.
• Adhere to the terms and conditions of the coverage.
• Comply with, or maintain compliance with, the lead hazardreduction treatment standards requirement required in the law.

The coverage may be reinstated if the insured provides thecarrier with a new verified report from a lead inspector accreditedby the Department of Environment. The statement must verify thatthe violation that caused the cancellation or nonrenewal has beencorrected within 30 days of the mailing of the notice ofthe cancellation or nonrenewal.

Standard notice requirements apply. Notices of cancellation mustbe mailed 10 days before the date of cancellation when cancellationis for nonpayment, and 45 when cancellation is for any otherreason.

A copy of the cancellation is also provided to the MarylandDepartment of the Environment, including the results of anyinspections if the cancellation is based on the results of thatinspection.

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Massachusetts: DL 24 41 Lead Poisoning Exclusion

Similar to Maryland, the Massachusetts form, DL 24 41 LeadPoisoning Exclusion, first redefines bodily injury in reference tothe exclusion as harm, sickness or injury arising out of leadpoisoning. Exclusions are then added. The first exclusion is forgross or willful negligence. Gross negligence is often defined asserious carelessness or a conscious and voluntary disregard of theneed to use reasonable care, which is likely to cause foreseeablegrave injury or harm to persons, property, or both. This is justshort of an act intended to do harm. Such carelessness is notinsurable.

Also excluded is an injury caused by the presence or exposure oflead in or on a residential unit including common areas that isrented or held for rental in either a one- to four-familyresidential building or a condominium or cooperative built before1978 that is owned by an insured and rented to others.

Remember 1978 is when lead paint was banned in the UnitedStates, so buildings constructed after that are not a hazard.Likewise any other structures on the same premises as theresidential buildings are excluded, and any appliances,furnishings, fixtures other than plumbing that are owned by theinsured and rented to others and contained in the rental dwellingsare excluded as well.

As with most insurance coverage exclusions, there are someexceptions that you should review with your agent or broker.

Massachusetts: DL 24 42 Coverage for Lead Poisoning

Along with the exclusion for lead liability, Massachusetts lawallows an endorsement for coverage for lead poisoning. The insuredis able to schedule a specific coverage amount at a specificlocation or locations.

The exclusion, DL 24 42 Coverage for Lead Poisoning, definesbodily injury as harm, sickness or disease that results from leadpoisoning and the care required to treat such injury. The injurymust result from the scheduled property including common areas usedwith that property due to the presence or exposure of lead. As inthe earlier exclusion, gross or willful negligence is excluded. Themaximum coverage amount is the limit listed in the schedule.

EPA recommendations

The EPA recommends having homes inspected for lead under thefollowing conditions:

• Your child has been diagnosed with lead poisoning.
• You live in a home built before 1978 and children will livethere.
• You are about to remodel or do anything that will disturb orgenerate lead-based paint dust and chips.
• You're buying or renting a home. Federal law allows buyers totest to determine the presence of lead hazards.
• You're concerned about possible lead exposure.

The EPA also has resources to help individuals find riskassessors, inspectors, and abatement professionals.

Editor's Note: All forms are available at FC&S Online with your subscription. Formore information, visit the website or call (800) 543-0874.

Related: You don't live in Flint? Lead is your problem,too

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