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Risk management in healthcare is moving from a reactive to a proactive model, one that goes beyond just looking at patient safety and medical liability, according to the NEJM Catalyst, a healthcare industry report. In the broader, more holistic view, they cite environmental risk as one of the critical areas of enterprise risk management (ERM) in healthcare facilities.

Amplified Environmental Exposures

Just as an increase in cyber-crime poses an amplified threat to medical data and patient privacy, dramatic changes in the healthcare industry have intensified environmental exposures. Hospitals, and outpatient and long-term care institutions face a number of potential problems, especially when they expand, update and/or acquire existing facilities. Mold, bacteria, medical waste, hazardous waste from ground contamination and hazardous materials (like asbestos) are some of the exposures that can pose life-threatening dangers to already weakened patients, as well as to medical staff, workers and visitors.

Moreover, "premises pollution" or “indoor air contamination” can expose institutions to serious reputational damage as well as financial losses from lawsuits or government fines — and such exposures may not be covered under many general liability and property insurance policies.

Here's an overview of the most critical issues.

8 Critical Issues

1. Healthcare construction risks

An ageing population and other factors have increased healthcare space needs. Whether renovating a facility or building a new one, the process of healthcare construction poses a wide range of risks that should be identified before work begins.

For example, excavation may uncover pre-existing contamination of soil or groundwater with hazardous waste, such as petroleum or chlorinated solvents. Demolition might reveal the presence of asbestos or other hazardous materials, or cause the spread of mold spores, dust and fumes throughout ventilation systems.

Safely disposing of contaminants or remediating asbestos can add time, cost and liability issues to a project. Depending on need, professionals may suggest procedures and systems to minimize the dangers from construction pollution, such as soil removal, a vapor barrier, containment systems, ventilation to the outside or "clean rooms" for construction workers.

Water can cause mold, which can be especially dangerous to patients. During construction, special care must be taken to ensure there is no water seepage at any potential intrusion points — for example, the building envelope, roofs, windows, doors and pipes.

For more in-depth information about how new government regulations and legislation are affecting healthcare construction, see our Chubb Environmental Advisory on the topic, "Sweeping Healthcare Changes Renew Focus on Environmental Risks of Construction."

2. Mold prevention and remediation

The health hazards of mold may be especially harmful — even fatal — to people with weakened immune systems. And, as mold can grow and spread rapidly wherever there's moisture and organic material, mold prevention requires vigilance in healthcare facilities.

It's important to follow industry-standard mold guidance consistently. This includes: identifying water intrusion points and fixing them; creating and deploying a mold remediation plan for any that is discovered; and implementing an ongoing mold prevention plan.

3. Legionella prevention

The bacteria that causes Legionnaire's disease grows in water towers and potable water systems and can even spread through airborne droplets.

Because of the virulent and deadly potential of legionella, The Centers for Medicare and Medicaid Services require healthcare facilities to strictly comply with legionella prevention guidelines or risk citations and other punitive measures that may harm an institution's reputation or ability to take on patients.

4. Hazardous waste and hazardous materials

Structures built before 1978 may have used lead-based paint, and asbestos is a very common material in many older buildings. Both of these are hazardous materials that must be managed and/or removed by qualified professionals.

“Polluter pays” laws

While construction and renovation also come with these hazards, those acquiring land or buildings for expansion should be especially aware of risks from hazardous waste and hazardous materials. So-called "polluter pays" laws can potentially make the owner liable for soil or groundwater pollution from waste disposals that occurred years before.

Additionally, liabilities may arise from removal and disposal of wastes at non-owned disposal sites. Transportation and disposal firms should be vetted for their legal compliance with all waste disposal regulations.

5. Petroleum tanks

Healthcare facilities and campuses often use petroleum storage tanks for emergency generators and vehicles. Fuel leaks and spills from tanks can contribute to hazardous waste remediation issues.

In 2015, the EPA updated its regulations regarding tank construction, operation, maintenance, testing and record keeping, in addition to requiring a variety of inspections. Many states have their own laws around these, which differ from the federal regulations and are, in some cases, even more stringent. A building acquisition may inherit contamination problems from an old fuel tank.

6. Medical waste and "sharps"

Similar to the liability for hazardous wastes, a healthcare facility's responsibility for infectious or pathological materials ("red bag" waste) or used needles and other "sharps" extends to whomever it contracts to transport and dispose of them. And, according to the Centers for Disease Control, sharps injuries harm more than 385,000 hospital personnel per year.

Disposal contractors should be audited for their legal compliance and in-house safety measures and procedures need to be periodically reviewed for efficacy.

7. Healthcare facility compliance and legal risk

Some laws governing healthcare facilities are regulated by the federal government, some by individual states, some have board of health involvement — and many are in flux. Being unaware of, or behind the times with, mandated practices or compliance rules and regulations could expose an institution to fines and/or legal liability in the event that patient safety is compromised.

8. Developing an environmental risk management plan in healthcare

Environmental risk isn't exclusive to healthcare facilities. But given that their mandate is to heal and care for people, the potential for loss due to a premise pollution event is arguably greater for health institutions than for most other industries.

Healthcare risk managers must consider environmental factors before undertaking renovation, construction or acquiring buildings a with an eye to hiring professionals who can assess potential issues. Physical plants must be regularly managed against the presence of contaminants or potential pollutants. Federal and state laws and board of health regulations must be kept up with and adhered to.


In today's proactive environment, many healthcare risk managers choose to further mitigate potential issues by insuring against environmental exposures. A qualified insurance agent or broker can offer specialized advice and knowledgeable solutions and help ensure positive outcomes in premise pollution situations.

For more information, read our white paper: Critical Environmental Risks in Healthcare

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