Emerging liability risks: Legionellosis

Legionellosis – a bacterial infection that can cause symptoms ranging from a mild flu to a deadly strain of Legionnaires’ disease (LD) – is fast emerging as a serious threat to the public and businesses. This risk bulletin reviews the current understanding of Legionella bacteria, legionellosis, possible risk exposures, and the potential impacts of the disease for businesses and the insurance industry. It has been prepared by AGCS and Praedicat, a leading science-based risk analytics company.

The Legionella bacteria is fast emerging as a serious threat to the public and businesses. Legionella bacteria, which thrive in warm, moist, freshwater environments, can cause symptoms ranging from a mild flu-like episode to full-blown Legionnaires’ disease (LD), a severe pneumonia with an average fatality rate of 5% to 10%. The number of individuals with LD grew by nearly four times between 2000 and 2014.

The insurance implications of legionellosis are such that significant risks of third party bodily injury and property damage exist, with a focus on public and products liability (PPL) as well as environmental impairment liability (EIL) insurance. There are a number of third party claims scenarios in which claimants could assert that the policyholder (i.e. the insured) is legally responsible for the loss the third party has suffered. For each scenario, insurance solutions exist.

AGCS developed this paper in partnership with Praedicat, an InsurTech company that applies science-based analytics to emerging liability risks for insurers and reinsurers.

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