Some Commercial Liability Insurance Policies Don’t Include Mold Exposure Claims

Created on:

May 20, 2020

With concerns about black mold growing, the insurance industry has seen an increase in mold insurance claims. However, mold coverage varies between policy types as well as between different insurance companies. Therefore, it’s critical to discuss with your agent what your commercial liability policy covers.

Black Mold Can Be a Big Deal

There has been a rise in mold detection in [City, State], in the last decade. While it’s possible this is an actual increase in mold, most likely it’s due to a greater awareness of the potential harm it causes.
Black mold is an almost entirely indoor phenomena, unlike other less harmful mold types. It loves building materials for the low nitrogen and high cellulose content, including:

Wool paneling and studs

It can also infest fabrics and furniture and can be exceedingly difficult to fully remove without professional help.

Mold Insurance Claims Have Skyrocketed

According to the International Risk Management Institute, mold claims have risen by more than 1,000 percent in certain areas and number in the tens of thousands now. The concerns about mold are even impacting the real estate market, with many buyers or commercial property renters demanding a mold inspection prior to occupancy.

Due to the increase in mold insurance claims, many insurers are carving out exclusions for it in much the same manner that was done for asbestos a couple decades ago. In the case of a mold claim, this is often done by claiming that the damage was due to a defect, such as bad construction or poor maintenance, since mold is a direct consequence of unnatural water intrusion to the interior of a building.

While the trend is to have exclusions for mold damage, it certainly isn’t industry-wide yet. If you have mold concerns – or want an inspection – you probably should talk first with a local mold remediation company that has long experience dealing with the problem in [City, State]. Not only can they help you locate and eradicate mold, they’re familiar with local insurance agents and can often advise you which ones do offer mold coverage and who has the best overall coverage for your area.

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