Does Commercial Property Insurance Cover Mold Damage?

4/10/2019 (Permalink)

Ask your insurance agent if you are covered.

If a building owner or manager suspects that mold is growing or professional mold testing has confirmed the presence of fungus in a structure, the next concern is whether commercial insurance covers mold damage. Some property insurance includes this coverage, but many policies exclude mold. Exceptions may be available, or coverage for this peril can be bought back in the form of an endorsement. Find out what to look for in terms of mold coverage and options for offsetting remediation expenses.

Exclusions and Exceptions

A commercial policy should make it clear whether mold is covered or excluded. Policyholders should examine a policy closely for several factors:

• Exceptions
  
• Limited coverage
  
• Endorsements for mold

An exception may provide limited coverage for mold resulting from a covered peril. For example, if a policy covered water damage mitigation and restoration, a limited amount of coverage may be available for mold caused by this damage that is reported in a timely manner.

Mold Endorsements

Endorsements can offer more protection, but policyholders have to add and pay for optional commercial insurance coverage. If an insurer offers an endorsement for mold, a policyholder can effectively buy back coverage for perils that are excluded from a commercial property insurance policy. An endorsement for mold insurance comes at a cost, but may provide more substantial coverage for this type of damage.

Check Limits

If any coverage is available for mold in a standard policy, it is likely to be limited. Policyholders should familiarize themselves with limitations and prepare to pay out of pocket for additional remediation costs.

It is a good idea to document and take measures to mitigate mold damage. Some commercial insurance companies may be more reluctant to cover properties with a history of mold. It may be possible to maintain coverage by keeping an insurer informed and hiring a certified mold remediation company in Bristol, PA.