Mold is a problematic, quiet environmental risk that can often go unnoticed until it’s too late. The recent increase in natural disasters, including hurricanes and historic flooding across the US, has fueled rising concern among insureds with respect to mold coverage. However, water damage from a natural disaster leading to mold is not the only concern, or even the most likely concern insureds should be focused on. A far more likely scenario is a broken pipe that goes unnoticed or an HVAC malfunction that goes undetected. Given the right conditions mold can grow rapidly. High humidity and heat in the summer along with any of the perils aforementioned can lead to a situation that requires professional removal and remediation. Unexpected remediation of mold can be a costly and unwelcome expense for any commercial or institutional entity.
Mold incidents have become a growing concern in a number of industries, but segments where we’ve seen a noticeable uptick include K-12 schools and hospitals. Both sectors have recently experienced significant increases in claims frequency. K-12 schools are particularly vulnerable given the nature of their operations. When buildings are closed for the summer, the air conditioning is turned off. Heat and humidity conducive to mold growth can result in a mold outbreak that is only discovered when the school reopens in the fall, offering a short time frame for proper remediation. As such, some school districts are now implementing routine inspections for mold during the summer months in an effort to combat this issue. Hospitals, on the other hand, are routinely uncovering mold problems during renovation projects. The vast majority of issues are being found in aged or poorly maintained facilities. Mold contamination is only detected once the project moves into the demolition phase. Mold can be found growing behind walls or surrounding corroded pipes during such projects. Mold can grow on any organic materials, including wood, paper, carpet, drywall, foods and insulation and mold growth can reoccur.
While there has not been a proven scientific link of mold to disease, mold is believed to cause adverse impacts on individuals exposed to it. Mold exposure can trigger existing asthmatic conditions, impact individuals with weakened immune systems and potentially lead to aggravated respiratory health issues. As one can imagine, the impacts are typically far more severe in children or people with compromised immune systems.
Unlike environmental risks associated with other common pollutants such as lead and asbestos, there are no federal laws or regulations for testing and meeting required safety health levels. However, the EPA provides resource documents for professionals that set forth guidelines pertaining to mold clean up and remediation (https://www.epa.gov/mold) or one can enlist the assistance of a Certified Industrial Hygienist to help address mold issues that are encountered.
Environmental insurance coverage responds to claims for bodily injury and/or property damage as well as remediation due to or associated with mold, subject to policy terms and conditions. One of the notable benefits of having an environmental insurance policy in place is that the insured will have fast access to highly specialized contractors experienced in mold remediation to respond to an impacted facility at the insurance company’s pre-negotiated rates. Getting boots on the ground quickly will get the insured back to business as usual as fast as possible and avoid prolonged business interruption expenses on top of costly remediation and potential bodily injury claims.
Please visit Ironshore.com for all disclaimers.