Time to Invest in Infrastructure

U.S. District Judge Stanwood Duval in the first quarter of 2008 dismissed a lawsuit against the U.S. Corps of Engineers over levee failures in New Orleans after Hurricane Katrina in 2005. Duval ruled the Corps had immunity from the lawsuit, not because he didn’t believe they were at fault, but because the Corps is protected by the Flood Control Act of 1928 — which shields the federal government from lawsuits when flood control projects fail.

In dismissing the suit, Duval said the Corps failed to protect the City of New Orleans and “squandered millions of dollars in building a levee system” it knew to by inadequate. He then called upon the citizens of the U.S. “address the failures of our laws and agencies.”

Infrastructure failures like the levees in New Orleans and the I-35 bridge in Minneapolis that collapsed last summer are exactly what Senators Chris Dodd, D-Conn., Chairman of the Senate Committee on Banking, Housing and Urban Affairs, and Chuck Hagel, R-Neb., had in mind in August 2007, when they introduced a measure to “revitalize, repair, and replace America’s aging and crumbling roads, bridges, transit systems, and water treatment facilities,” according to a statement released by Dodd’s office.

“You can’t journey to a brighter tomorrow by relying on yesterday’s infrastructure,” Dodd said in the announcement. “This measure can help rebuild our roads, bridges, transit and water systems, improve our quality of life, and spur jobs and economic growth. By investing today, we can minimize costs down the road and provide a brighter, more secure future for all Americans.”

What does that have to do with insurance?

Plenty. The dismissed lawsuit against the Corps generated nearly 490,000 claims by consumers, governments and businesses — including insurance companies — that sought trillions of dollars in damages. It’s easy to play “what if,” but what if the levees hadn’t been breached in New Orleans after Hurricane Katrina?

Claims resulting from damage caused by crumbling roads, worn out bridges, decaying transit systems, shoddy treatment plants and, yes, inadequate levees are claims that could be prevented by repairing what we have and preparing for what we will need.

In announcing their bill, the National Infrastructure Bank Act of 2007, Dodd and Hagel noted that in the two preceding weeks an 83-year-old steam pipe burst in midtown Manhattan, releasing asbestos laden particles and causing widespread damage, and contaminated drinking water near Camp Lejeune in North Carolina may have exposed families in the area to high levels of dangerous chemicals. In the evening of the day of their press conference, the Minneapolis bridge collapsed.

Dodd acknowledged that it will be a huge financial commitment to modernize the nation’s infrastructure. But only nations with a strong infrastructure can fully compete in a global economy, and it is up to the citizens of the United States and our duly elected representatives to take care of our own house. That means investing the time, money and effort to construct, repair and protect an infrastructure that will not only serve us now but well into the 21st century.

Editor’s Note: This article orginally appeared in the February 11, 2008, edition of Insurance Journal-South Central.