Mold is a destructive nemesis for the construction industry and it has caused numerous problems for all kinds of contractors ranging from electricians to HVAC to roofers to environmental remediation. For this reason, it is vital that contractors across all segments and their insurance brokers consider their potential mold exposures and create a risk management program to effectively address these risks.
Mold losses can impact any variety of different contractors. For example, roofing and window installation contractors have been involved in litigation for faulty work resulting in water intrusion and mold problems. HVAC contractors have seen a sizable increase in claims activity. Improper installation of drip pans and their drains have caused mold to quickly spread throughout buildings and schools. Maintenance and janitorial contractors hired by school systems to maintain and clean buildings during the summer. These contractors have decided to turn off air conditioning units in order to save money. Unfortunately, the lack of AC increased the humidity inside the schools and helped promote the mold growth. Finally, one of the most vulnerable contractors is a plumber due to the fact that they deal directly with water sources. Improper installation of piping or valves can have dire consequences when it comes to mold and mold growth. Electricians are not exempt either, as they could easily drill a hole for an electrical conduit and puncture a pipe, flooding a floor.
A major issue with mold is that its damage may not be noticed immediately. It often begins growing in hidden areas — behind walls, under wall coverings, beneath carpeting, within HVAC ducts — and by the time one smells the odors and realizes there may be a problem, the resulting damage and liabilities can be enormous. In the end, mold claims are continuing to increase. This phenomenon is especially true today as the U.S. economy is strong and people are making capital investments in new buildings or renovations. The discovery of mold and the resulting property damage, bodily injury, and clean up costs are sizable.
Insurance for mold liability is a tricky business. Because property and liability coverage typically exclude mold damage, coverage of these exposures has shifted to self-insurance or other policies such as environmental. These kinds of policies also have multiple exclusions, so contractors and their brokers must read all the fine print and make sure they understand exactly what’s covered and what isn’t. The risks of mold are easy to understand, but the means of addressing them are slightly more challenging. Talk to the experts at C&S Specialty Underwriters, and let us help you find a policy that protects your business from the financial, legal and reputational damage mold can cause.