A scoping study on the costs of indoor air quality illnesses: an insurance loss reduction perspective

The number of indoor air quality (IAQ)-related health complaints in commercial buildings, and the frequency of litigation over the effects of poor IAQ is increasing. These increases have ramifications for insurance carriers, which pay for many of the costs of health care and general commercial liability. However, little is known about the actual costs to insurance companies from poor IAQ in buildings. This paper reports on the results of a literature search of buildings-related, business and legal databases, and interviews with insurance and risk management representatives aimed at finding information on the direct costs to the insurance industry of poor building IAQ, as well as the costs of litigation. The literature search turned up little specific cost information, but indicated that there is a strong awareness and growing concern over the “silent crisis” of IAQ and its potential to cause large industry losses. The source of these losses includes both direct costs to insurers from paying health insurance and professional liability claims, as well as the cost of litigation. In spite of the lack of data on how IAQ-related health problems affect their business, the insurance industry has taken the anecdotal evidence about their reality seriously enough to alter their policies in ways that have lessened their exposure.