Does Commercial Insurance Cover Mold Damage?

2/2/2021 (Permalink)

Mold growth from moisture in Brookhaven, GA

Water damage from storms, floods and leaks can cause significant damage to your property. To make matters worse, the moisture from these events also provides a fertile breeding ground for mold. If your property has suffered water damage, you should review your commercial insurance policy to see what coverage is provided for mold.

Why Mold Is a Problem

Many people may see mold as primarily an aesthetic issue and focus on getting rid of the stains and smell. However, mold damage is a serious problem for several reasons:

• Can grow on almost any surface
• Often grows under floors, behind walls, in ducts, behind ceiling tiles and other places where it isn't visible
• Feeds on the material it grows on, which may damage or destroy it
  

What Commercial Property Insurance Covers
Most commercial insurance policies include a fungus exclusion that eliminates coverage for damage caused by the growth, proliferation, presence, or spread of bacteria, fungus and wet or dry rot. Mold, mildew, spores, toxins, by-products and scents produced by fungi are included in this exclusion.
The standard ISO commercial policy contains three exceptions to the fungus exclusion. Mold that occurs because of fire or lightning is covered. A specified cause of loss that occurs because of fungus is covered. Finally, mold that occurs because of a specified cause of loss other than fire or lightning is covered by mold insurance, called Limited Fungus Coverage.

How Limited Fungus Coverage Works
Limited Fungus Coverage applies when a specified cause of loss results in mold. For example, if you have a broken pipe and the water damage from that pipe causes mold, then the cost of removing the mold or repairing any damage caused by the mold is covered up to the $15,000 limit.
Though commercial insurance policies broadly exclude coverage for mold, if the mold occurs due to a covered cause of loss, limited coverage applies in most policies. An insurance professional in Brookhaven, GA can help you review the specific coverages in your policy.