First Party Property Insurance Coverage For Mold Damage: Does It Exist When The Policy Excludes Loss Caused by Mold?
- Topics:
- Property
- Tags:
- Berger Kahn,
- Business Operations,
- Corporate Insurance,
- Coverage,
- Insurance,
- Property Insurance
- Source:
- Berger Kahn
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Overview: Most property insurance policies expressly exclude coverage for loss caused by mold and fungus. While this exclusion may appear to express a clear intent that mold and fungus losses will not be insured, the coverage determination is often not nearly that simple. Instead, an analysis of what caused the mold, and thus what were the other causes of the damage, is generally necessary to determine whether coverage will be provided. The cost to fix the system or appliance is not covered, but coverage is provided for the resulting water damage. This exclusion carves out an exception when fire, among other things, ensues from one of the excluded perils. This article explains that while policy provisions exclude fungus and mold damage from coverage, if there is a covered ensuing loss, or if the “efficient proximate cause” is a different, and covered, peril, coverage may be provided. The law regarding first party property insurance for mold damage will continue to develop, both in the courts and in state legislatures.
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Format: HTML | Date: Jan 2003 | Pages: 1
