Black Mold and Liability Insurance: Tips on Getting Covered

Black Mold and Liability Insurance: Tips on Getting CoveredIn 2001, black mold cases cost insurance companies over 1.2 billion dollars. This includes the cost of inspection and testing, remediation, attorney fees and punitive damages for builders’ neglect in dealing with the problem.

Since 2001, the number of black mold cases has steadily risen. Every year there are billions of dollars in lawsuits. Because of this, insurance companies have stopped carrying mold coverage. The new suits are brought against landlords, builders and property owners.

Unfortunately, many of these individuals do not fully understand their insurance coverage as it pertains to mold. Mold liability suits are on the rise, and you don’t want to be the next one!

So, What Can You Do?

Getting Coverage

Due to these recent mold cases, many insurance policies have included a “mold exclusion” to their insurance policies. If you are lucky enough to have an earlier policy that doesn’t have a mold exclusion, you should hang onto it.

The mold exclusion clauses are making it tough to get coverage for mold. You can often only get mold coverage as a stand-alone policy, and it carries high premiums. You can get it as an add-on to your existing policy as well, but it is often expensive.

If you live in a humid are such as the Pacific Northwest, it may be a good investment to get the extra coverage. Also, if the building property is old, you might want to be covered. Older buildings were built before there were strict guidelines for builders to deal with toxic black mold removal.

You also may be able to reduce the cost of coverage by developing an Operation & Maintenance plan for dealing with mold. Your O&M may include a plan for dealing with mold, a schedule for inspection and training for your employees in dealing with black mold remediation.

Fighting Mold

The best thing you can do is take care of mold problems when they occur and keep the mold out of your buildings. If your properties have a history of mold, you have to keep an eye on them. Talk with your tenants or employees and work on communicating with them. Make sure they understand how to check for mold, and notify you when they do.

If you are a landlord, you can revise your lease to include a section about black mold. Some landlords make their tenants fully responsible for mold cleanup, as long as it’s not a structural problem with the house. A better idea is to simply put a clause in the lease saying that it’s the tenants’ responsibility to notify the landlord of any black mold problems. This will keep you from being legally negligent.

It’s a really good idea to periodically pay for mold testing and inspection. This is expensive, but it may save you from a lawsuit. It also may save your tenants from suffering mold-related health problems.

Note that a high number of these cases have been brought in the states of Florida, Texas, California and the southwestern states. That’s because these places are prone to mold problems. If you are a landlord or developer in these areas, you need to take special care in mold prevention, inspection and removal.