Mold is everywhere as over 100,000 varieties have been discovered. It is common in the air we breathe and the food we eat. 3 things allow for mold to reproduce: mold spores, water and food, such as wet wall board or carpet. Modern pollution polices define mold as an irritant and a contaminant. Toxic mold is a greater health concern. If you can see mold or smell it you have a concern.
Pollutants mean any solid, liquid, gaseous or thermal irritant contaminant including smoke, vapor, and soot fumes acids, alkalis, chemical and waste. Some contractors and transportation companies carry pollution liability coverage to protect us from events that are sudden and accidental. Pollution headline stories are long term expensive remediation and have other adverse consequences for our environment.
Are molds a health concern? If mold growth is active, extensive and persistent it has the potential to cause health problems for some. The most common reactions are allergic causing, sneezing, coughs and eye irritations. Certain individuals with respiratory conditions such as allergies, asthmas or chemical sensitivities or those with weakened immune systems are at risk. Infants, young children or the elderly are in general at greater risk to mold.
Is mold damage to your property covered under a typical special form business owners or homeowner’s policy? This type of claim is normally a first party potential loss. There is no universal answer, however some mold claims maybe covered and others not. Coverage depends on each policy’s language, endorsements and exclusions. Do you need or want mold coverage? Insurance companies expect the insured to read and understand their policies. Policy holder naivety is never a covered claim. An experienced insurance agent is often helpful in answering this coverage question.
Insurance policy exclusions are important to review when determining mold coverage. Water damage to property resulting from maintaince problems, continuous or repeated seepage, leakage, humidity or condensation, landscaping or drainage problems are not. Carriers do not allow you to buy back this coverage. Flood water damage is a common exclusion, but the peril of flood can be repurchased from special flood insurance programs. $540 is the average cost for flood insurance depending on a designated flood map indication and the properties closeness to water.
Sudden and accidental water damage from broken water pipes, sewer backups or failure of sump pumps is a covered peril, especially if sewer back up/sump pump failure is purchased by endorsement or a rider. It’s important to review the sublimit and in some cases additional limits are available for more premiums. Mold developing from water damage may be covered. However, with the rise in mold claims some policies specially exclude this loss or limit the amount of recovery. A special stand alone mold policy is available as a last resort, but these range from $5,000 to $25,000 and are more expensive in older buildings or more humid property locations, such as Louisiana.
Beyond 1st party mold damage is the realm of the potential 3rd party recovery from mold damage. Check with your HAVC contractor to determine if they have pollution liability coverage and specifically mold property damage coverage. Many policies have a limited fungus and mold damage limit and this could be too low. A certificate of insurance will show proof of coverage and can be request prior to entering a contract.
Awareness is the key to protection. Review your insurance policy and look at the property section for mold coverage or exclusions. Consider your circumstances and determine what your risk tolerance is for a mold loss. What steps are in order once water damage occurs? What steps can be taken prior to mold claim? Where can tests for mold or should one be obtained? Once mold occurs who are the best contractors to remediate the damage or is it possible to do it yourself?
Take advantage of the experienced Snyder agent force to answer your mold concerns. Our experience can help you unravel the peril of mold.
Larry Van Alstine
Account Executive
Snyder Insurance
Springfield, IL