One Man’s Mold is Another Man’s Gold: The 21st Century Mold Rush
By Robert Warne - August 13, 2002With mold plaguing insurers and insureds alike, its effect on those representing claimants has been the complete opposite. With over 9,000 mold related claims filed in the U.S. and Canada over the last decade, attorneys have seen mold turn to gold before their very eyes.
The California Legislature has been trying to keep pace with the fast growing fungus. Last year a first-of-its-kind government regulation was passed that enacted the Toxic Mold Protection Act of 2001.
The SB 732 legislation called for the California Department of Health Services to conduct a series of studies to evaluate mold so it could more effectively regulate mold related public health issues. The studies will be used to establish indoor air quality standard for mold spores.
In addition, the state's Occupational Safety and Health Standards Board just adopted a new regulation that requires the mold breeding conditions, such as uncontrolled intrusion or accumulation of water, to be treated as a basic measure of sanitation.
Pending legislation set forth by SB 1763 would prevent insurers from excluding mold coverage in property and liability policies. Specifically, if the legislation passes, carriers will be required to cover mold as an “ensuing peril” if it is caused by fire or heavy water damage.
SB 1763 would allow carriers to exclude mold as a “covered peril” if the exclusion is stated in clear, explicit, and understandable terms.
Ironically toxic mold has cursed two California locations where the outcomes of many mold claims are being played out—in the court.
Tulare County has struggled to deal with the claims originating from a mold-contaminated wing in the Visalia courthouse. The incident has given rise to approximately 140 claims filed by employees who worked in the building and have developed mold related conditions.
The Santa Clara County courthouse’s mold problem was so bad it had to be shut down for a period of time. The employees had to be moved into temporary trailers. The county settled its claims with the general contractor, architect and other third parties for $12 million last year.
The recipe is simple; just add water and you get mold or gold depending on what side of the claim you are on. For this reason, the legislature and the courts will have to move cautiously fast before the fungus breaks us down physically and financially. | 
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