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The Mold Underwriting Market

There will be full mold exclusions on all commercial insurance policies for the foreseeable future. All property and casualty insurance underwriters have issued new mold exclusions to either eliminate or severely limit the amount the insurance company will pay for mold related damages. Anyone with an indoor air/human loss exposure combination now needs highly specialized environmental insurance covering mold.

Homeowner's Coverage
Some, but not all, homeowners and condominium owner’s insurance policies will provide a sub-limit for consequential damages caused by mold if the water intrusion event is covered under the policy. Higher limits to cover mold related damages are available from some insurers for additional premium on the homeowner’s policy.

Commercial Insurance Coverage
Commercial insurance buyers face a different challenge. With the new exclusions in place, building owners and their contractors will no longer have property or liability insurance coverage for new mold related damages. Environmental insurance covering mold damages is available for contractors, service providers and building owners. For building owners trying to insure their mold risk they can look to their contractors for appropriate mold insurance protection, and they should insure their own risk. Where this may sound like over kill, this is the exact scenario building owners use to handle day-to-day insurance when they hire a contractor. The contractor is asked for a certificate of insurance for General Liability and Workers Compensation. As a backstop to the contractors insurance, building owners maintain their own General Liability insurance. What is different today is the building owner and their contractors will have mold exclusions in their traditional insurance policies.

Services vendor and contractors will either need a Contractors Pollution Liability insurance policy if they are performing operations on the property or a Professional Liability policy if they are preparing reports or surveys of mold contamination. Each of these policies should specifically address mold as a covered “pollutant” in the policy form.

Property owners will need their own Environmental Impairment Liability (EIL) insurance policy. Although EIL is a “liability” insurance policy, it includes coverages that are normally found in property insurance policies including restoration and business interruption insurance for losses arising from mold contamination. By combining the contractors environmental coverages with their own, property owners can complete the circle of insurance protection for mold damages the same way they address all other liability loss exposures. To implement these insurance strategies property owners will need to change their procurement contracts to reflect the new insurance requirements.

For more information on environmental insurance and mold risk management see the website of the Environmental Risk Resources Association at www.erraonline.org.

Mold Coverage Offered By The Environmental Insurance Market

Environmental Impairment Liability:

AIG - Coverage available
XL Environmental - Coverage available avoiding long-term habitational, schools, apartments.
Zurich Environmental - Coverage available with class restrictions
Evanston - Coverage available with class and territory restrictions
National Environmental Coverage Corp/Everest - Coverage available with class and territory restrictions
Liberty Mutual - Coverage available with class and territory restrictions
Gulf - Coverage available avoiding habitational, apartments, schools, hospitals, hotels.
Chubb - Coverage available

Contractors Pollution Legal Liability:

AIG - Coverage available
XL Environmental - Coverage available with class restrictions
Zurich Environmental - Coverage available on specialty contractors only
American Safety - Coverage available on speciality environmental contractors only
Evanston - Coverage available with class and territory restrictions
National Environmental Coverage Corp/Everest - Coverage available with class and territory restrictions
Liberty Mutual - Coverage available with class and territory restrictions
Gulf - Coverage available on qualified commercial contractors
Chubb - Coverage available
Seneca - Coverage available for qualified remediators or CIH

Professional

AIG - Coverage available
XL Environmental - Coverage available with class restrictions
Zurich Environmental - Coverage available on specialty contractors only
American Safety - Coverage available on specialty environmental contractors only
Evanston - Coverage available with class and territory restrictions
National Environmental Coverage Corp/Everest - Coverage available with class and territory restrictions
Liberty Mutual - Coverage available with class and territory restrictions
Gulf - Coverage available on qualified environmental professionals
Chubb - Coverage available
Seneca - Coverage available for qualified remediators or CIH

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