Standards Needed for Mold Exposure, Testing and Remediation
By: Richard Zarandona & Kent Holland, Arch Insurance Group
Currently, there are no federal or state established standards of safety thresholds for mold exposure. Scientific agreement has not even been reached on whether mold (or various types of mold) are hazardous or injurious to health. Nor are there standards for mold testing and remediation. Establishing criteria and methodology for clean-up must be accomplished in order to determine a reasonable standard of care for designing and carrying out mold mitigation efforts.

Keeping Cleanup Costs Palatable
By: William A. McLellan, GAB Robins Environmental & Marine, Inc.
Although the costs associated with pollution cleanup and remediation activities are never going to leave a good taste in your mouth, there are ways to keep them at least palatable.

Managing Mold Risks in a Post Exclusion Era
This material will be presented for the first time at the Society of Chartered Property and Casualty Underwriters annual meeting October 13th in New Orleans by David Dybdahl CPCU, ARM, Senior Consultant with American Risk Management Resources Network. Members can login and view the presentation by clicking here. Non-members can view the password protected area on a one time basis by clicking here.

Mold is the fastest growing insurance problem in the United States. In this presentation Mr. Dybdahl details the impact of various mold related damages exclusions in traditional insurance policies and then details what kinds of insurance policies should be purchased to insure mold loss exposures on a prospective basis. The presentation contains new research comparing and contrasting the relative magnitude of mold claims to asbestos, superfund and fire damage claims in the United States. A surprising finding is mold claims mirrored insured fire damage in 2002! Mr. Dybdahl predicts which business sectors will be most affected by mold damages and presents some of the state based hazard rankings generated by the new Madison Mold Relative Hazard Ranking Model. Some of the results of Mr. Dybdahl research are surprising. If you thought insurance companies were going to be the big losers from mold damage claims, they rank seventh on the list. Insurance agents ranked second! If you thought mold was a Texas homeowners insurance problem, you will surprised by the state relative hazard rankings for mold damage claims.

Environmental Insurance Market Update

Mold E&O Claims
We have heard of the first professional liability claim against an insurance agent who failed to offer mold coverage to their client. We are predicting up to 10,000 professional liability claims per year against agents who leave their clients unintentionally uninsured for mold losses. Some carriers still do not have mold exclusions on their E&O policies offered to insurance agents and brokers. If you are an insurance agent lucky enough to have this coverage available, buy higher limits!

Mold Market
A survey of the environmental underwriters shows most markets ahead of plan for the first half of 2003. Look for more emphasis on annual renewable policies and fewer discounts on multiple year policies.

Up to half of all new business being submitted is mold related, which is still a tiny fraction of the businesses that are now bare for mold related damages due to exclusions in traditional policies.

ERRA members can view the mold insurance market at www.erraonline.org. Watch for new mold insurance products in the near future. Many new products are under development.

Claims Adjuster's Mold Exclusions
Mold related claims exclusions are finding their way into claims adjuster’s professional liability policies. With mold exclusions, adjusters will need to avoid working water intrusion claims.

Secured Creditors Coverage
Most markets have moved away from writing "loan balance pay off" coverage, but continue to write "lesser of" coverage on their secured creditors policies. For more information on these coverages, see the article "Environmental Insurance To Protect the Interest of Lenders" in this issue.

Finite Risk Policies
Watch for restrictions in the number of insurance companies offering funded fixed price remediation insurance products. This is still a competitive market.

Traditional Environmental Coverages
Demand for traditional environmental insurance products remains strong and rates are relatively stable. Underwriters are competing for business.

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Coming Soon!

The Premier Conference Series on Environmental Insurance
The Environmental Insurance Forum