Why silicosis poses small business insurance challenges

There’s been a renewed focus on the safe use of engineered stone in construction.

Now a growing range of voices are calling for bans on the use of silica-based materials such as quartz, commonly used for kitchen benchtops.

The inhalation of silica dust is associated with a range of lung diseases, the most common of which is silicosis. Due to this risk, businesses that cut materials made with silica may find it difficult to insure their operations in the future, except in limited circumstances.

The issue usually arises when the stone is cut dry, according to Safe Work Australia. Using wet methods can help to significantly reduce the risk of people contracting silicosis from breathing in silica dust.

“We always treat engineered stone with respect on our building sites, designating dedicated areas for cutting purposes and ensuring we use the right tools and extraction fans,” says Simon Clark, founder of Sustainable Homes Melbourne, who manages a team of architects, project managers and carpenters.

Increasingly Clark says he’s looking for alternatives to engineered stone. “We are going to explore not using silica in products moving forward,” he says. Alternative materials may include timber and natural stone.

“Any business that is involved in importing, manufacturing or cutting engineered stone face complex risks”

Poor records pose a challenge for businesses

Poor record keeping at businesses whose work involves cutting engineered stone to measure is a problem when making and validating insurance claims related to silicosis diagnoses.

Many businesses don’t keep accurate records of the work being performed around cutting engineered stone and the details of the people involved in this work. This can make it difficult for people suffering from lung diseases due to inhaling silica dust to claim against these businesses down the track.

While victims may be able to claim against these businesses’ workers’ compensation policies, the disease often doesn’t become apparent until many years after the work was performed. This can leave many people without any way of claiming compensation because there is no paper trail to their former employers.

This is one of the reasons businesses that cut and work with engineered stove may find it difficult to secure effective insurance cover, Steadfast Broker Technical Manager, Michael White says.

“The main risk is to people working in factories. Employers of these people need appropriate workers’ compensation insurance. Because these claims can be so expensive, the workers’ compensation insurer, as well as government bodies, actively pursue recovery from stone suppliers and other parties,” says White.

It’s understood that some insurers are starting to put total exclusions on their liability policies for silicosis.

“At the moment, that’s a minority. So, builders are able to get policies that don’t have an exclusion for silicosis,” White says. “But stone merchants and business that import and manufacture bench tops may find their policies will exclude silicosis,” he adds.

It may be possible to take out a claims-made policy for this risk, with the policy only

triggered once the claim is made. However, these policies may require policyholders to disclose risks such as silicosis when taking out this insurance.


Do you have the right cover?

Any business that is involved in importing, manufacturing or cutting engineered stone face complex risks.

It’s important for these businesses to work with experts to help ensure their risks can be mitigated.

Talk to your broker today to find out more.

Important notice – Steadfast Group Limited ABN 98 073 659 677 and Steadfast Network Brokers

This article provides information rather than financial product or other advice. The content of this article, including any information contained in it, has been prepared without taking into account your objectives, financial situation or needs. You should consider the appropriateness of the information, taking these matters into account, before you act on any information. In particular, you should review the product disclosure statement for any product that the information relates to it before acquiring the product.

Information is current as at the date the article is written as specified within it but is subject to change. Steadfast Group Ltd and Steadfast Network Brokers make no representation as to the accuracy or completeness of the information. Various third parties have contributed to the production of this content. All information is subject to copyright and may not be reproduced without the prior written consent of Steadfast Group Limited.


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