Mold and insurance: exclusions and coverage gaps

In plain English

R520 recounts how a surge of mold claims around 2001 and 2002 led insurers to add mold exclusions and lower limits across homeowners, commercial and professional policies. For property owners this means coverage for mold is often uncertain, and more remediation is paid out of pocket. Owners without insurance support are also more likely to pursue recovery from others, sometimes in court, with the remediator involved.

For contractors, R520 notes that standard general liability policies now usually exclude mold and pollution, so specialized contractors pollution or environmental coverage is needed. Professional liability coverage is recommended for anyone writing reports or protocols, since professional services are commonly excluded elsewhere. Claims-made policies may need tail coverage. The guide advises against insuring only some jobs or only one subsidiary, and says a remediator with no mold coverage should tell customers so in writing.

R520 also notes that insurance terms can themselves limit what a job can include. Practical takeaway for owners and property managers: ask any mold contractor or assessor for proof of coverage that does not exclude mold. Texas note: Texas requires licensed mold assessment and remediation businesses to carry liability insurance, and the Certificate of Mold Damage Remediation affects how insurers may treat past mold damage; see the Texas law topics.

Key points

• Many homeowner policies now exclude or cap mold coverage.
• Ordinary contractor liability policies usually exclude mold.
• Look for contractors pollution or environmental coverage that includes mold.
• Report writers need professional liability coverage.
• Ask contractors for proof of mold coverage before hiring.

Official text

This topic is covered in our own words because the standard behind it is copyrighted; we cite it below rather than reproduce it.

Citations

• IICRC S520 Reference Guide, IICRC S520 Standard and Reference Guide for Professional Mold Remediation — Reference Guide — Ch. 7, pp. 86–92. Best practice
• IICRC S520 Reference Guide, IICRC S520 Standard and Reference Guide for Professional Mold Remediation — Reference Guide — Ch. 9, p. 104. Best practice

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