CRITICAL ISSUE REPORT

RF radiation from wireless antennas: The next black swan?

As wireless industry boom continues, insurers must confront radiation exposure risks

By Gloria Vogel

Third-party worker over-exposure to RF (radiofrequency) radiation from wireless antennas is a risk where the insurance industry remains vulnerable to large losses, but it is an area where the industry has failed to identify and appreciate its potential exposure. While many insurers have telecom carve-outs in place, or policy exclusions and aggregate limits, they remain unaware that they are still exposed through general property liability, workers compensation, or other policies.

Unfortunately, it often takes an event with large insured losses to bring the need for loss prevention into industry focus. In fact, there are many examples of insured losses that could have been prevented with sound policies towards improved safety oversight and better loss control, but the insurance industry is often looking at events retrospectively rather than anticipating potential problems that may lie ahead. Just because a black swan has never been seen doesn't mean that one doesn't exist.

A black swan is a highly improbable event with three principal characteristics:

1. It is unexpected.

2. It has major impact.

3. After the fact, the event is rationalized by hindsight.

Just because there have been few known claims to date for RF radiation exposure from wireless antennas doesn't mean that there won't be hundreds of thousands of them in the future. Indeed, today's workers are unaware that their health issues may be related to their exposure to those wireless antennas. It won't take much to raise their awareness; the first plaintiffs' bar TV campaign will cause a firestorm of litigation across the nation.

This lack of focus on loss prevention by insurers, plus limited public safety oversight by government, is apparent with respect to RF radiation third-party worker over-exposure. Property owners (residential and commercial) that host wireless antenna sites believe that they have no risk exposure based upon assurances from their wireless tenants. But, that simply isn't true. All workers have the right to a safe workplace—including roofers, painters, electricians, HVAC technicians and maintenance personnel, who must service properties with wireless antennas. Applicable laws and regulations specifically require that employers provide their employees with working conditions that are free of known dangers; that workers receive information and training about hazards; and that workers learn methods to avoid harm.

Today, property owners do not monitor the hazards of RF radiation from wireless antennas. Property owners and their insurers thus have exposure to claims from injured third-party workers on their properties—from those who are regularly put in jeopardy by having to work in close proximity to wireless antenna systems without any means of protection from RF radiation over-exposure.

An important distinction exists between RF exposure from cell phones and RF exposure from wireless antennas. RF emissions from wireless antennas are hundreds of times more powerful than any from hand-held devices. These are two completely separate issues! While the link between cell phones and brain cancer is currently unsupported by scientific or medical evidence, the FCC has identified human exposure limits to RF radiation based on long-standing, peer-reviewed scientific research that establishes a causal link between RF exposures and cognitive injuries: (http://www.ewh.ieee.org/soc/embs/comar/standardsTIS.pdf). Moreover, there is already established legal precedent for claims (AT&T Alascom v. Orchitt).

Escalation in claims will be driven by the ever-increasing proliferation of wireless systems, with more residential and commercial property owners leasing their space to satisfy the "demand for all things wireless." Already, there are more than 500,000 governmental and commercial antenna systems throughout the United States, and that figure is likely to grow substantially as we move from 3G to 4G networks and increased broadband.

The answer 

What's the answer to the wireless RF problem? It is a national RF safety protocol that will ensure all workers have the necessary training, certification, and dynamic site-specific safety information to protect against RF radiation at every wireless transmission site in the nation. Individual insurers need to focus on implementing their own loss control measures to minimize claims from RF radiation over-exposure. This might include working with outside firms to provide safety training and monitoring of RF risk exposure, applying additional exclusions and caps on coverage, or seeking other solutions. One outside firm that specializes in this particular area is RF CHECK, Inc. (www.rfcheck.com).

It's time for insurers to act now to refocus attention on additional loss prevention for all high-risk areas. The industry needs to be more proactive in mitigating risk before disaster strikes, rather than being reactive in taking steps afterwards. Identifying risks and controlling losses can add value to policyholders and insurers alike. Accordingly, let's see a renewed focus on loss prevention measures so those monumental black swan losses never occur. Let's look at all existing and emerging risks, especially those of RF radiation from third-party worker claims.

The author

Gloria Vogel is managing director at Vogel Capital Management, a New York-based investment and consulting firm. She is also an adjunct professor at NYU's School of Continuing & Professional Studies, and a contributing author on the Web site www.seekingalpha.com, where she writes an insurance blog. She spent several years at Swiss Re in investor relations, credit analysis, and private equity investments, and was an equity research insurance analyst at several major investment banks, including Lehman Brothers and Bear Stearns. She is a Chartered Financial Analyst (CFA), and holds Series 7, Series 66, and a life insurance producer license.