Mold Insurance and Litigation
The Insurance Information Institute estimates that $3 billion in mold claims were paid out in 2002, the most recent year for which detailed statistics are available. Most states have responded by passing laws allowing insurance companies to exclude mold from coverage, so plaintiff lawyers now target landlords, condominium associations and school districts instead. "I've got seven or eight cases set for trial between now and June," says William Slaughter, a defense lawyer in Ventura, Calif.
Mold-related claims have become a primary concern for the insurance industry. Mold litigation has exploded and the number and size of water-related property claims have skyrocketed. In response, the insurance industry is changing policy language, claims-handling procedures, and loss reserving, while trying to keep the regulators at bay.
Many insurance companies are now grappling with how to address mold claims and many - especially homeowner's policies - are excluding mold from their coverage entirely.
Homebuilders and smaller contractors, like plumbers, are finding it increasingly expensive to get mold coverage, if they can at all.
Despite a decade of research, litigation and billions of dollars in insurance claims and lost productivity, SBS (Sick Building Syndrome), BRI (Building Related Illness) and IAQ (Indoor Air Quality) issues are still prevalent in the commercial buildings sector. Most of the efforts have been reactive: report a problem, identify its cause and fix it. And while that's the cheaper, expedient "Band-Aid" solution, it's not stemming the tide of these costly, debilitating and otherwise preventable circumstances.
In the early days of the debate on the unity of automobile safety restraints, consumer advocacy groups faced as daunting a task as there ever was in American businesses: to overcome the resistance of the powerful automobile manufacturers to detract from their profit margins by adding safety devices, creating unwanted ìperceptionî in the public eye that cars were somehow unsafe. This repeated itself with advent of air bags and anti-lock braking systems (ABS) in the 1970s and 1980s. Each time, hundreds of millions of dollars were spent in courtrooms arguing the case, while the public was at risk, lives were lost, and insurance claims were ever increasing.
