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Exposures

Environmental Mold Exposure Risk Insurance

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Mold is everywhere—has been around forever—and was never more than a maintenance problem in the past. So why does it make building owners, managers, landlords, and tenants quake at the mere mention of the word?

Because if it is not prevented, contained, or remediated properly, the consequences for property owners can be grave, seriously ruining not only their financial standing, but their reputations as well. Mold is an exposure that has been a game-changer for many insurance providers, and one that has changed the way insureds educate and protect their investments & reputation. Although concerns about mold are not new, the way businesses are working to prevent it and handle the risk have certainly shifted.

Will insurance cover mold?

General Liability and Property policies will sometimes include coverage for mold, but the limits that are offered often will not even pay for investigative costs, let alone remediation costs. In addition, some of these policies have maintenance exclusions and will not cover mold caused by water from condensate or humidity. Environmental insurance policies often include coverage for mold as part of the definition of “pollutants” or “pollution conditions”. Even if they don’t include it, coverage is typically available via endorsement to the forms.

But coverage for mold is only one part of a comprehensive mold management approach. The other important component is having a mold management plan that is utilized by entities so that personnel are aware of mold problems before they become health issues for tenants or building personnel. Often, mold can be cleaned up before it becomes a health hazard, but in other cases, particularly if the source of the mold growth cannot be identified, it can become a persistent, costly challenge.

What is a mold management plan?

Every insured has a unique mold risk relating to their operations. Mold growth can start in the first 24 to 72 hours after the onset of water damage if not properly addressed and cleaned. Prompt attention can drastically decrease cleanup costs, physical damages, and possible future bodily injury. The purpose of these mold management plans is to demonstrate to the carrier that both the owner and their employees will implement the procedures they have in place. But just as important as implementing these procedures, they also need to acknowledge the significance of a situation where negligence isn’t necessarily a factor in the event of a claim. As with most circumstances, the more positive information you can provide, the better the outcome. Learn more about mold prevention plans.

The combination of a mold management plan with an environmental insurance policy can provide entities with the comprehensive protection against mold bodily injury, property damage, and cleanup cost claims that may be incurred. Mold is typically a coverage enhancement on a Contractors Pollution Liability policy or Site Pollution Liability policy.

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