Environmental insurers have been excluding mold coverage from their policies for about as long as standard carriers have, generally for the reasons outlined above. Over the past year or so, however, environmental insurance carriers have provided more coverage to a growing number of commercial clients. After a great deal of study, these insurance companies have concluded that the mold risk is manageable for certain types of clients, if they take proper precautions. Coverage is becoming more available for commercial contractors and for commercial-property owners and managers. It remains hard, though possible, to find coverage for residential contractors and habitational sites. For agents, coverage is more available for many of their clients than it has been since the end of the 1990s. Here's the situation for some typical insureds:

Contractors: To buy mold coverage, contractors need to prove they have received formal "mold awareness" training. Such a course will examine industry-specific causes of mold; procedures for preventing common problems; and mold issues related to the contracting process, post-work inspections, subcontractor management, etc. The course also will instruct contractors how to avoid getting involved in existing mold problems at work sites. After completing such a course, a contractor should create new job-site and safety procedures that incorporate what the contractor has learned. These procedures become an insurance company's assurance that the insured actually does what he or she was taught to do.
Not all training is of the same quality. Agents considering writing mold coverage for their clients should determine in advance which vendors their insurance companies approve. Training costs several thousand dollars at a minimum, so it's important to be sure it will pass muster. Certain carriers now furnish training themselves, building the cost into the coverage premium. This enables the insurer to control the quality of the training its insureds receive.
Facilities: To qualify for coverage, facilities need to show they have a detailed maintenance program that will enable them to find water intrusion before it leads to mold. They need to have a program for notification by which each tenant is required to abide. They need formal programs to monitor all work performed at their facilities by outside contractors. To ensure their programs will meet with insurance-company approval, many facilities managers, like contractors, undergo formal mold awareness training.
An issue unique to facilities is the construction of the building itself. Carriers will take a close look at its age, construction and property loss history. Loss runs will be vital for successful submissions.

Special Reports /

Environmental insurance market looks up in 2005

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