Getting the facts

Mold has always existed and it always will — it occurs naturally. What’s new is its explosion in the media and courtroom as a “hot button” issue that could impact nearly everyone.

Anyone is susceptible to a mold lawsuit. Mold grows after construction, repair work, remodeling, a natural disaster or any event that permits moisture to be introduced into a building.

Building owners, landlords and property managers might be sued by tenants for failing to maintain the property or to provide a safe living environment. School districts and governmental entities could face claims over schools or government buildings. Hospitals, clinics and other health care facilities may be responsible for not properly preventing the development and spread of mold spores.

Building contractors or HVAC contractors may be held liable for constructing buildings or maintaining ventilation systems that allow moisture to infiltrate. Manufacturers of siding or roofing products that permit moisture to enter a building or keep it from escaping may also be held liable. Real estate sellers and agents who facilitate sales transactions could face a lawsuit.

Owners who believe mold may exist in their buildings must respond quickly, identifying whether the building has potential health risks. Working with a reputable environmental testing company and an environmental remediation company, owners can identify the cause of mold, and repair and remediate as needed. Remediation efforts should be supervised by an independent firm, and the original testing company should conduct confirmatory testing afterward.

Builders, contractors, architects and other professionals who face potential litigation because of defective work or other conduct also must respond promptly. They should submit claims to insurance carriers in a timely manner and determine an appropriate course of action, especially if building residents claim health problems allegedly related to mold exposure.

This group can be proactive to avert claims and be in the best position to handle claims that do occur. These companies should institute risk management policies and programs to minimize exposure to mold claims.

An attorney can assist companies with internal risk management audits, revision of contracts to minimize exposure and review of insurance coverage for mold claims.

There is an ongoing battle in the courts as to whether insurance policies will cover claims for mold. When determining coverage issues, first make sure that the moldy property is covered under the policy, and determine if the policy affords coverage for claims initiated for mold damage or liability sought from the policy holder.

In either event, examine all possible insurance policies, including any in which the company, person or group is identified as an additional insured in another’s insurance policy. Generally, an insurer has a duty to defend when a lawsuit or complaint reveals the possibility that the claim may be covered by the policy.

However, insurers have raised a wide variety of theories in an attempt to deny coverage. Depending on the specific language of the policy, an insurance company’s denial of or delay in providing coverage may constitute a breach of the insurance contract, and the insurer might be liable for damages related to its bad faith denial of the claim. Carrie Wagner Bootcheck is an attorney with Bose McKinney & Evans LLP,. Reach her at (317) 684-55230 or [email protected].