ERP - Environmental Risk Professionals

Mold and Fungi Health Impacts

Mold remediation contractors face many environmental exposures that could lead to bodily injury, property damage, and cleanup liability. Failure to fully identify mold intrusion, contain the contamination, and properly perform remediation could lead to health hazards and additional mold growth. Many products used to disinfect and deodorize mold contamination contain chemicals that could be hazardous, and the handling, mixing, and transporting of these materials could lead to environmental liability. Remediation work at jobsites could disturb existing asbestos or lead-based paint. Damage to, or improper sealing of, plumbing and HVAC systems could lead to additional moisture intrusion and mold growth.

Failure to Identify All Sources of Mold Growth

Failure to identify all contributing causes of mold growth or active or dormant growth locations may result in incomplete recommendations and remedial actions. Improper seal-off, clean-up, and decontamination at a jobsite or use of equipment could cause the release of mold or mold spores, leading to additional property damage and health issues.

Incomplete or Improper Remediation

Failure to properly remediate and dry out mold intrusion or follow protocols for contaminated material removal may cause the mold to spread to previously non-contaminated areas and present serious long-term health risks to occupants, resulting in post-remediation claims against the contractor.

Disturbance of Asbestos or Lead-Based Paint

Sample collection may involve the disturbance of building materials, which could have asbestos-containing materials or lead-based paint. Asbestos can be found in many areas including around wiring, in wall cavities, insulation, ceiling, and floor tiles. Failure to identify these materials or properly contain, handle, and dispose of them could release hazardous inhalable fibers that can cause third-party injury exposure and cleanup liability.

Hazardous Chemicals in Cleaning Products

A variety of chemicals, including quaternary ammonium compounds, peroxides, hypochlorite, glutaraldehyde, and iodophors, may be found in products used at job sites, such as antimicrobials, disinfectants, deodorizers, mold stain removers, fungicides, and preventative coatings and sealers. Even “natural” botanical disinfectants and deodorizers (e.g., thymol) are toxic at certain concentrations. Chemicals used at improper application rates or concentrations, in combination with other chemicals, or with incorrect delivery systems can cause residues to remain in the building or create hazardous air emissions. Human health can be impacted by direct surface contact or inhalation.

Transportation and Disposal Risks

Spills or leaks during transportation, or loading and unloading, to and from jobsites of chemicals, disinfectants, deodorizers, fungicides and coatings, and sealers can lead to cleanup liability or contamination of soils and groundwater. Improper disposal of these materials, or jobsite waste contaminated with mold, asbestos, or lead-based paint, can lead to cleanup and environmental tort liability.

HVAC and Plumbing System Issues

Existing plumbing, refrigeration, or HVAC systems may be disturbed during remediation activities. Improper repair, sealing, or damage to these systems may result in small continuous water or air leaks in which moisture condenses, pools, and accumulates in building materials to form new mold growth. Building HVAC systems could spread mold spores throughout the building and should be considered a high priority for investigation and repair. Ventilation system mold contamination should be mitigated as soon as possible in a manner that does not expose building occupants to dust and mold spores.

Professional Errors and Omissions

Remediation contractors perform professional inspections and analyses. An error, omission, defect, or deficiency in any test performed or inaccuracy in preparing and performing work plans, diagnostic lab testing, or post-remediation certification could lead to tort liability and economic losses.

Contracting operations completed “by or on behalf of” the insured

Contracting operations performed at a jobsite

Third-party claims for bodily injury and property damage

Third-party claims for cleanupDefense of third-party claims

First-party emergency response costs

First and third-party transportation pollution liability

Mold, legionella, bacteria, and fungi

Sudden and accidental coverage for owned/leased locations

Remediation contractors can combine Commercial General Liability, Contractors Pollution Liability, and Professional Liability into one package policy. Workers’ Compensations and Automobile policies may be offered.

Loading and unloading

Lead and asbestos

Non-owned disposal sites

Claims Scenarios & Examples

A contractor completed some water and mold remediation work at an apartment building. After the work, the tenants were told they could return to their apartments. However, after returning, a tenant became sick and sued the property management company and the contractor, alleging the sickness was due to mold. The lawsuit claimed bodily injury and professional negligence.

After doing mold remediation work, the claimant alleged that the remediation work was not completed properly, which led to more mold problems. The restoration contractor was sued, and claims were over $420,000.

After experiencing flooding in their home, a couple called their insurance company and were recommended some water damage remediation companies. They hired one to come out and fix the damage. However, within two weeks, the couple smelled what they thought was mold. They paid for mold testing out of pocket, which confirmed mold contamination in their home. The insurance company also recommended some mold remediation companies, and the couple hired one. However, they claimed that the company did not remove the mold but covered it up. The couple sued the restoration and mold remediation contractors and the insurance company for recommending the contractors.

An office building’s tenants complained of health issues and toxic fumes. The building was a converted strip mall. An inspection determined that the building had water leaks and mold. The inspector gave some recommendations for cleaning it up, including hiring a mold remediation company. The building owner hired the cheapest bid for $6,000, significantly lower than the recommended $20,000 estimate from the inspector to adequately handle the job. After the work was completed, subsequent inspections found mold remained, and improper isolation, sealing, and decontamination protocols were used that allowed contaminated dust and debris to migrate. With additional remediation required, total project costs exceeded $50,000, and the building owner also lost a tenant in the process.

A couple hired a mold remediation company to do some work at their property. However, during the work, the workers mixed a sterilizing and disinfecting solution with a bleach solution, resulting in odors that contaminated the home and the items inside. The plaintiffs claimed that the home was uninhabitable, endangered their family’s health, and that the residence would need demolition. The mold remediation company filed the claim with their general liability carrier, but the carrier denied the claim due to the pollution exclusion.

Moisture seeped into an air control tower for several years, causing mold to grow and air traffic controllers to get sick. The airport hired a mold remediation contractor to remove the mold. However, after the work was completed, employees continued to feel sick, and testing determined that mold remained. The airport sought to recover the $25,000 it cost to remove and replace the drywall in the building to help remove the mold. The lawsuit also claimed that the contractors did not use safety precautions or guidelines to help protect the controllers during the work.

A wife struggled with illness for a long time but always felt better when the couple went on a vacation. When they returned, she became sick again, and they realized it had something to do with the house. They moved out of the house and had testing done on their home. Mold was found in the basement; test results returned positive for toxic Aspergillus mold. The couple had a mold remediation company come to clean it up; however, after the work was completed and they moved back in, the wife became sick again. A second mold remediation company found some additional mold the first company had missed. Air tests were completed again, and more toxic mold was found. The couple sought to file a lawsuit against the first remediation contractor.

A city’s government sued a construction company for faulty mold remediation work at elementary and middle schools. The construction company agreed to pay the city $3.1 million to resolve allegations.

Contractors

Mold Remediation

Environmental Exposures May Include: