BITCO Insurance Companies
Release Date: December 31, 2009
Over the course of the past twelve months, the Consumer Product Safety Commission (CPSC) has received more than 2,200 reports from residents in 32 states, the District of Columbia, and Puerto Rico who believe their health symptoms or the corrosion of certain metal components in their homes are related to the presence of drywall produced in China. Earlier this year, the CPSC formed an interagency task force to address the complaints. They have released preliminary findings as well as a plan at the following website: http://www.cpsc.gov/info/drywall/index.html.
In the course of investigation, the problem drywall was identified to be 1/2 inch in width, a material commonly used in residential home construction. Most commercial buildings do not typically install 1/2 inch drywall. The business impact to commercial insurers is not known at this time. The type of alleged corrosive drywall is relevant for purposes of assessing risk potential.
Though the CPSC does not comment on litigation, there are three categories of pending lawsuits: some litigation regarding coverage issues; multi-district litigation comprised of physical damage claims, and litigation surrounding health concerns. The property damage claims were slated to begin in Louisiana Multi-District Court January 2010, but the date has been postponed. To stay informed about litigation, check Chinese-Manufactured Drywall Products Liability Litigation at http://www.laed.uscourts.gov/drywall/drywall.htm.
Part of the drywall investigation includes tracking the imported drywall chain of commerce. A number of critical activities have resulted from this investigation. Two that will be highlighted here include improving labeling of the manufactured drywall and consumer protection. The CPSC vote to establish a Notice of Inquiry requesting comments from drywall manufacturers on labeling requirements. The CPSC briefing meeting where the labeling requirements are discussed can be found at http://www.cpsc.gov/webcast/previous.html.
On December 3, 2009, the Federal Trade Commission (FTC) released a Consumer Alert. After the testing of drywall performed by the Federal Interagency Task Force, a strong association was found between the problem drywall, the hydrogen sulfide levels in homes with that drywall, and corrosion in those homes. The FTC says homeowners should be on the alert for anyone trying to sell test kits, inspections, and quick fixes for tainted drywall. The Federal Interagency Task Force is studying testing and remediation protocols for affected homes, but no federally-approved testing kits or remediation methods currently exist.
A timeline of CPSC findings is presented along with the number of incidents reported over the course of 2009. The CPSC is in the midst of long-term corrosion testing for electrical and fire safety equipment and further study on effective remediation efforts. They anticipate releasing long-term study findings in June 2010. The CPSC will be addressing drywall manufacturer labeling requirements and other recommendations as well.
The information contained in this publication was obtained from sources believed to be reliable. ISO Services Properties, Inc., its companies and employees make no guarantee of results and assume no liability in connection with either the information herein contained or the safety suggestions herein made. Moreover, it cannot be assumed that every acceptable safety procedure is contained herein or that abnormal or unusual circumstances may not warrant or require further or additional procedure.