Mold, A Growing Problem
For millions of years, mold has been a part of the environment. As mankind became more civilized, people became more concerned about the possible negative health effects of living with mold. In fact, the Bible even references mold as being “unclean.”
Although we have been exposed to mold from the very beginning, the financial impact of mold contamination has increased dramatically in recent years. For anyone who owns, occupies, manages, maintains, or builds any type of structure, the risk of financial loss has significantly increased.
What is Mold?
Scientifically speaking, mold is a multi-cellular, microscopic vegetable plant. Mold reproduces by releasing millions of spores into the air. Landing anywhere, so long as the right conditions exist, the new spores can flourish and continue to reproduce. In damp areas with high heat and humidity, mold can grow rapidly. About 1,000 species of their near 100,000 species in the world are found in the U.S.
Today’s construction techniques work to make buildings and structures watertight. However, the same methods to secure buildings also prevents the introduction and circulation of fresh air. If seepage, leaks, condensation, or storm damage introduces water into the structure, the trapped moisture creates a perfect environment for mold contamination.
The Cost of Mold
Mold contamination can cause enormous expenses to property owners. If contamination occurs, the costs can be divided into three general categories:
- Decontamination costs: Mold can spread rapidly. Often the only way to remove mold is through the removal of all contaminated building materials and personal property.
- Loss of use expense: When remediation efforts begin, often the premise will need to be vacated until the cleanup is complete. This may result in lost rental income, production, or increased expenses to relocate residents living in contaminated residential structures.
- Medical and legal costs: If an individual claims their health has been affected by mold, the medical and legal costs can be significant.
In addition to the financial costs associated with mold contamination, there is the human cost. Although most species of mold are considered harmless to humans, some studies have suggested certain molds produce mycotoxins which may be hazardous to living animals, including humans. It is thought mycotoxins may cause immune deficiency, chronic fatigue, respiratory problems, migraine headaches, and even memory impairment.
Insurance and Mold
Mold contamination was commonly covered by property insurance policies if the contamination occurred as a direct result of an insured loss such as fire, windstorm, or other covered peril. However, in the absence of such damage, mold contamination has been considered to be a maintenance issue. This means it was the responsibility of the property builder or owner, not the insurance company.
Then, in 1999, a number of court cases began to chip away at the long-held concept of mold as a maintained issue. Effectively the standard property insurance coverage was liberalized. The result was an explosion of mold related insurance claims. The majority of claims were filed in California, Florida, and Texas. Insurers began to pay out billions of dollars for mold contamination.
As a result, insurance companies began approaching their insurance departments asking they be able to add specific wording to exclude mold contamination claims. They succeeded, and today most insurance policies have a mold, fungus, bacteria, and wet rot exclusion (or variation thereof). Nowadays, insurers may offer mold contamination coverage at their option, for an additional premium, and at significantly low sub-limits.
Reviewing your insurance policy with a licensed insurance agent will identify what, if any, coverage you will have available to in the event of a mold contamination event. Carefully review the contract language and also determine when coverage would be afforded and under what circumstances. Some policies only provide for the cost of cleanup while more expansive coverage may provide for legal defense or bodily harm.
With the right insurance policy in place, following these tips may work in preventing having to file a mold contamination claim at all:
- Respond quickly: Mold contamination can spread quickly. Don’t let a suspected area go unattended as the visible area may only be a small part of a larger contamination issues. Any suspected areas should have all dampness eliminated and repaired quickly. After repair, inspect on a regular basis and consider hiring an environmental contractor for testing.
- Take mold seriously: Your family, residents, or customers could suffer ill effects from mold exposure. If you don’t take prompt, reasonable, and effective measures to mitigate mold exposure, you could be sued.
- Document all water damage: Keep detailed records of any and all water damage claims, including conversations with adjusters and contractors. If mold is apparent or even suspected, use photographs, videos, and commentary to record the extent of the damage and your efforts to mitigate that damage.
- Monitor for recurrence: Whether you have suffered water damage or not, it is prudent to regularly check for mold on your property. Early detection can mean the difference between a quick and inexpensive cleanup effort and a very expensive, time consuming
The big damage these small, microbial plants can cause can be astounding. To learn more about your coverage related to mold and our other personal and commercial risk management solutions, contact our office at (850) 942-7760 and speak with a licensed agent.
Demont Insurance Agency, Inc. The Insurance You Need, The Assurance You Deserve