Changes in General Liability Insurance Regarding Sick Buildings
Be Aware Of The Changes In General Liability Coverage And Terms Often Used To Exclude Mold Claims.
An increase in mold insurance claims and litigation has led to changes in most commercial general liability policies over the years. Primarily, these changes have been instituted to reduce premiums and eliminate most mold coverage. Typically, these issues are grouped in with sick structure exposures, a term used to describe normal business risks and contractor responsibility. As a commercial operator, you should be aware of the changes in general liability coverage, and terms often used to exclude mold claims.
1. Pollution Exclusion
Most insurers will view a mold claim as an environmental or toxic tort claim, meaning that mold falls under the pollution exclusion. While there are arguments to be made about the validity of mold as a pollutant under the standard definitions, there is currently no dissenting or judicial opinion as to the applicability of the exclusion for the claims.
2. Business Risk
Many mold insurance claims are rejected because they are deemed a business risk issue, meaning that the fungus is a result of poor quality or craftsmanship. These exclusions lay the blame on property owners or contractors, and stipulate that the responsibility for repair is theirs.
3. Fungi or Bacteria Exclusion Endorsement
The Fungi or Bacteria Exclusion Endorsement is an amendment to many commercial general liability policies. This endorsement excludes the costs associated with mold cleanup and remediation. It also eliminates personal injury.
4. Limited Fungi and Bacteria Coverage Endorsement
While most policy changes have meant bad news for mold claims, the Limited Fungi and Bacteria Coverage Endorsement means that property owners may have some relief from mitigation costs. This endorsement may cover some of the expenses associated with mold remediation in the Jackson County, Oregon area. However, the aggregate limit is likely lower than previously offered.
Before submitting mold insurance claims, review your policy and take note of any of the above changes. While insurers are looking for ways to reduce exposure to fungi and bacteria demands, there may still be endorsements that can help. Reach out to your insurance company and discuss the coming changes and your concerns.