Microbial coverages and their rising losses have been a hot topic in the environmental industry, from water invasive legionella outbreaks to hotel renovations revealing widespread mold growth. Large mold-based losses have been on the rise in hospitality and healthcare industries, and we are starting to see the repercussions of these claims. Underwriters are taking conservative measures when evaluating these risks and some carriers have increased their minimum premiums and ratings for habitational mold. Automatically sub-limiting the exposure has become a conventional countermeasure as well as per room mold deductibles. What can we do to ease underwriters’ concerns and provide the most comprehensive and competitive terms for our insureds? Mold prevention plans are not a new idea, but we are now seeing this requirement take a more pivotal, upfront roll in assessing these risks. 

Your insureds may have similar plans they know by a different name, some of which include: Water Infiltration Awareness, Water Damage Prevention Plans, or Moisture Intrusion Awareness. Most have procedures in place for both routine preventative maintenance for water awareness and measures to be implemented in the event of actual water damage. It’s usually a matter of dusting off a manual to be formally presented and gathering their maintenance log. For others, it’s taking the time to write down what they already do on a regular basis. Some carriers will take the time to review your insured’s procedures after binding and provide helpful suggestions to diminish risks.

Every insured has a unique mold risk relating to their operations. Mold growth can start in the first 24 to 72 hours after the onset of water damage if not properly addressed and cleaned. Prompt attention can drastically decrease cleanup costs, physical damages, and possible future bodily injury. The purpose of these plans is to demonstrate to the carrier that both the owner and their employees will implement the procedures they have in place. But just as important as implementing these procedures, they also need to acknowledge the significance of a situation where negligence isn’t necessarily a factor in the event of a claim. As with most circumstances, the more positive information you can provide, the better the outcome.

There are several resources online if your insured is interested in developing their individual plan. This does not need to be a long, in-depth analysis.  You will find these are not “one size fits all,” but instead should be tailored to individual operational hazards. Below are some frequently discussed items in a prevention plan.

• Inspecting for water leaks and sources of water damage, including HVAC systems, plumbing joints, clearing drains, and roof integrity in attic spaces.
  
• Maintaining low indoor air humidity and air circulation.
  
• If water damage is found, what do they do? Who do they contact? How is the area cleaned? How do they handle damaged items? How do they prevent further damage once it is discovered?
  
• If they have had a mold issue in the past, what did the insured do to prevent loss from arising again?
  
• Discuss any training seminars that the insured has with their employees on detecting these exposures and the frequency.
  

We are finding preventative plans to be a strong defensive measure to circumnavigate declinations when marketing an account and avoid increasing premiums and ratings for renewals. We are always available to discuss your insured’s mold risks whether it’s on a Contractors Pollution Liability policy or on a Site Pollution Liability policy. Policy language is continually being updated and changed in the excess market defining when claim would be covered or denied. It is important to have an educated broker who understands and regularly discusses these details with the ever-evolving environmental and financial market. Coverages afforded are not the same on every policy, and it is important to be mindful of the options available for 1st and 3rd party liability, most importantly whether cleanup costs and bodily injury/property damage are included.

Beacon Hill Associates prides itself on being knowledgeable in the area of Mold coverage. We frequently discuss mold concerns with our carrier partners to stay current on trends for underwriting risks with the potential indoor air quality problems and other mold issues. Please contact us at (800) 596-2156 or visit us online at www.b-h-a.com .