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Mold problems strike commercial property

Commercial property owners are experiencing a growing number of legal and financial problems stemming from insurance claims resulting from property damage or illness caused by mold. Insurance companies attribute the rise in claims to increased publicity, noting that mold always has existed. In addition, there also has been a focus on health problems, such as allergies and neurological damage, caused by mold.

"Most insurers have reported triple-digit increases in the frequency of mold-related claims in commercial buildings over the past year. The cost of these claims is difficult to quantify because mold is lumped into categories such as construction defects or water damage, not broken out separately," says Robert P. Hartwig, chief economist at the Insurance Information Institute.

Mold-related expenses cost companies that underwrite homeowners' insurance $1.3 billion in 2001, a number that is expect to grow in 2003, according to the Insurance Information Institute.

The recent surge of mold claims has prompted insurers to exclude or limit mold coverage. Premium prices are expected to rise as insurers receive an increasing number of claims for mold damage.

Legislators have been working to establish guidelines to regulate mold-related litigation and standards. Rep. John Conyers Jr. (D-Mich.) introduced a bill that would require mold inspectors and remediators to be licensed. In addition, the bill would call for research by the Environmental Protection Agency, the National Institutes of Health and the Centers for Disease Control and Prevention to set standards for acceptable levels of indoor mold. In January 2003, the Senate also plans to address the issue with new legislation.

12/12/2002  

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