You will have seen the recent spike of media reporting on the call by trade unions to ban the use of engineered stone. This recent ABC article reports that the Federal Labor Government has called for Safe Work Australia to advise on the mechanics of a ban, and state workplace safety ministers are meeting to discuss the matter, so some form of action appears likely.

In very general terms, what are the insurance implications, and what are the reasons to consider avoiding this product in future?

Risks

The information below comes from the Safe Work Australia Code of Practice Managing the risks of respirable crystalline silica from engineered stone in the workplace (October 2021). informed by Planned Cover do not profess to have any expertise in this area.

Engineered stone is an artificial product (not a natural stone in its pure form) that “is created by combining and heat curing natural stone materials that contain crystalline silica (such as quartz or stone aggregate) with chemical constituents (such as water, resins or pigments)”. It is often manufactured into products like kitchen benchtops. As compared to most natural stones, it has a high percentage of silica, up to 97%.

The solid form of engineered stone is not thought to be hazardous. But when engineered stone is cut, ground, drilled, sanded or similar, it produces respirable dust containing crystalline silica. If breathed in over time, this dust can cause fatal lung disease (including silicosis or lung cancer) and can increase the risk of other diseases and conditions.

Insurance

The broking team at Planned Cover report that they have seen some public liability and workers compensation insurers start to introduce exclusions for engineered stone, but have not yet seen professional indemnity (“PI”) insurers introduce exclusions.

If engineered stone were to lead to a spike of claims against construction professionals, PI insurers may introduce exclusions, as they have done for ACP cladding and other non-conforming building products over the last five years. It is possible that those exclusions would only apply to future work performed after the exclusion is introduced. However, it is also possible that the exclusions would exclude cover for both past and future use of engineered stone.

Liability

The biggest risk of compensation claims would seem to rest with manufacturers, suppliers, builders and trades who control the working environment of those who cut the stone. At this point, we are not aware of design consultants being targeted.

However, it’s possible that claims arising out of specifying or approving the use of engineered stone could be made against a consultant in future, and any such claims would very likely be based on negligence or breach of statutory safe design duties. The key question is: would a reasonable consultant, at the relevant time, have specified or approved this product?

Media articles, including calls to ban engineered stone, can form part of the evidence in such a claim. As the publicity around engineered stone grows, so does the potential evidence for a negligence claim against consultants who continue to specify it, or to approve builder requests to substitute it.

Consultants should also consider the consequences if the contemplated legislative bans were instituted mid-project. The delay and cost that would result from replacing the engineered stone mid-project should be factored into any decision to specify or approve it. It might be best-for-project to avoid its use.

Specific advice on how to manage the risks relating to engineered stone is well beyond our insurance-based skill set. As a starting point, we would refer consultants to guidance from Safe Work Australia including:

• Code of Practice Managing the risks of respirable crystalline silica from engineered stone in the workplace (October 2021)
• Other resources (including further state-based guidance)

In states which have adopted the “nationally harmonised” work health and safety law (which is every jurisdiction except Victoria), the Code of Practice can be adopted into the legislation, which would give it authoritative force and mean it can be used as evidence of what was “reasonably practicable”. Any consultant specifying or approving engineered stone should give weight to its recommendations, some of which are:

• Reduce the amount of crystalline silica in the product
• Adopt a made-to-size product that can be installed with little to no need for cutting or grinding
• Make note of the risks associated with engineered stone as part of safe design reporting obligations in section 22 of the relevant Work Health and Safety Act, and regulation 295 of the relevant Work Health and Safety Regulations.

In Conclusion

The above factors should make consultants very cautious with respect to engineered stone. Consultants who make the decision to avoid its use should consider instituting a clear company-wide policy prohibiting it, and compiling a file of media reporting and other guidance to justify that approach. This will put front-line staff in a stronger position to resist any pressure from builders or others who push for substitutions.

Wendy Poulton
Manager Risk Services

This article is only general advice in respect of risk management. It is not tailored to your individual needs or those of your business, nor is it intended to be relied upon as legal or insurance advice. For such assistance you should approach your legal and/or insurance advisors.