The explosive growth in toxic mould damage claims since 2002 has led to an almost universal exclusion of mould-related claims in property and general liability policies. To close this gap, consider a customized environmental insurance policy, which specifically addresses mould as a covered cause of loss:
Transferring Risk
For those in the building industry, a contractor’s pollution liability (CPL) policy is specifically adapted to address mould as a pollutant. CPL insurance was originally developed in the 1980s for hazardous waste firms before mould was a pollutant of concern. Today, CPL is commonly purchased by those performing environmental and mould remediation work, but any contractor that constructs or works in buildings occupied by people should have a modified CPL endorsement to cover its mould-loss exposure.
According to environmental risk management experts, there are over 100 different manuscript environmental insurance policies available, and most can be adapted to cover toxic mould.
Contract Provisions
Anyone entering into a real estate, construction or other kind of contract concerning real property should consider whether or not the risk of future mould claims and remediation should be allocated by contract and, if so, how. For instance, construction contracts and real estate leases may include indemnity language specifically intended to:
- allocate liability for mould-related personal injury claims;
- include representations and/or warranties concerning absence of mould; and
- name the party(s) responsible for identifying and remediating mould.
If you are entering into a contract, be sure to read the contract language carefully to gain a clear understanding of your portion of the liability.
Managing Exposures
In addition to transferring risk through insurance and contracts, Axis Insurance Group has the resources to help you develop protocols to identify, prevent and remediate mould. If there is an established standard operating procedure for prevention of mould and water intrusion, underwriters will weigh that favourably. We can provide information to help you to:
- determine if a mould problem exists;
- establish prevention methods; and
- correct the problem through remediation.
The environmental insurance market is constantly changing to meet the needs of the marketplace. We are committed to developing solid relationships with top-rated carriers who are experienced in environmental liability coverage.
