Does Your Commercial Insurance Cover Mold Damage?

5/11/2020 (Permalink)

Does Your Commercial Insurance Cover Mold Damage?

If you suspect mold damage in your commercial property, it's important to get it inspected and cleaned up as quickly as possible. Not doing so puts your business at various risks including building damage and liability for the health of others.
Mold clean up can be costly, so it's important to understand what your commercial insurance does and doesn't cover when it comes to mold mitigation and restoration.
In the 1990s, it became commonplace for insurers to write fungus exclusions, which includes mold, into their policies. The exclusion is included in the general ISO commercial policy. It provides limited coverage for mold damage caused by water damage or water leakage.
As the property owner, you will have to first show that you took all available actions to stop and repair the leak before the insurance will provide for remediation. Limited fungus coverage allows for removal and repairs not to exceed $15,000.
This means, if you had a water leak in your property for some time and only found it many months later, your policy would cover damage directly related to the leak, including:

• the cost of removing the mold
  
• repairing and replacing any materials damaged during the removal process
  
• the cost of any testing
  
• the cost of restoration following removal
  
  

So, while it's likely you don't need to add an additional mold insurance policy to your existing plan, it's important to be aware of the limitations of your current plan. It's unlikely that a mold problem would become so bad that repairs would exceed your policy's annual aggregate.
Fast action is important if you suspect water damage in your property. If you allow the problem to persist, and a mold problem gets out of control, your commercial insurance provider could deny a payout to help cover the expenses if they can prove you were negligent in your duty to stop the problem as the property owner.