Specializing in Insurance and Bonds for Environmental and Fire Water Restoration Contractors

The Wrong and Right Way to Cover Mold

The Wrong Way

Defining mold as a pollutant in a Contractors Pollution policy (CPL) may be the wrong way to protect you against a mold claim.

Why? Most Contractors Pollution policies only cover damage from a pollution incident or event. The definition included for pollution event is usually similar to " ..the discharge, dispersal, release, or escape of any solid, liquid, gaseous or thermal irritant, contaminant, or pollutant."

Mold spores are naturally occurring in all places, just add moisture and they will multiply. However, a single fiber of asbestos cannot multiply. That is why defining the mold as a pollutant crosses into gray area.  The definition of a pollution incident means that there must be a dispersal or release of the contaminant in question to trigger coverage. Down the road an insurer may deny your mold claim on the basis that you did not release or disperse any mold (it just re-appeared after your job was finished either because the owner did not correct the source of moisture or a new source of moisture was added).

The Right Way to Cover Mold --- BISA's Way

BISA's policy covers claims from a "Fungi or Bacteria Incident"
A definition of a fungi or bacteria event means " an incident that would not have occurred but for the actual, alleged, or threatened inhalation of, ingestion of, contact with, exposure to, existence of, or regardless of whether any other cause, event, material, or product contributed concurrently, or in any sequence to such injury or damage".

With the way our policy defines mold, you can say goodbye to denied mold claims!

Case Study

Recently, a seemingly routine claim for mold damages was declined by a well-known insurance company who had written a CPL (contractors pollution liability) policy for a mold remediation operation. Imagine the contractor's shock when he realized that he would have to defend a $100,000+ claim on his own.

Why Did This Happen?

Despite the fact that many courts throughout the U.S. have already ruled that mold is NOT a pollutant, the contractor purchased a CPL policy from a typical insurer that defines mold as a pollutant. Therefor, in order for coverage to be triggered, a claim would have to be made that the contractor was liable for the release or dispersal of a pollutant (mold) during a covered operation. As a result, coverage was denied for a claim that mold grew throughout a house after the contractor dried or repaired it. An insurance policy from BISA that properly covers mold and bacteria would avoid this unfortunate result.