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A Video Explaining How Insurers Avoid Mold Litigation 

https://zalma.com/blog

 Insurance companies in most states have been permitted to exclude mold  coverage from new and existing policies. There are hundreds (perhaps  thousands) of pending cases against homeowner insurance carriers seeking  coverage for losses incurred as a result of mold contamination. In many  of these homeowner policies, damage \\u201ccaused by\\u201d mold contamination is  expressly excluded from coverage. In the face of this exclusion,  homeowners often take the position that their claimed damages were not  \\u201ccaused by\\u201d mold, but rather that the damage was caused by some form of  water intrusion which resulted in mold contamination, or some other  covered peril, and therefore the loss is covered. Insurers often contend  that the exclusion applies to any claimed damages concerning mold,  arguing either that the damage itself was caused by mold or some other  excluded cause or event.  State courts that have faced this issue cannot agree. Some have held  that the \\u201ccaused by\\u201d exclusion applies to all mold damage, while other  courts have found an ambiguity in the exclusion. 

Summary judgment for  either party is almost impossible because coverage decisions are  determined by the facts presented at trial.  The most recent ISO forms, which are used by many insurers in their  homeowner policies, contain the following exclusion regarding mold:  We will not pay for loss or damage caused directly or indirectly by  [mold]. Such loss or damage is excluded regardless of any other cause or  event that contributes concurrently or in any sequence to the loss. But  if [mold] results in a Covered Cause of Loss, we will pay for the loss  or damage caused by that Covered Cause of Loss.  Courts across the country have reached different conclusions regarding  its meaning and applicability. The video details some of the cases that  deal with mold exclusions and the ensuing loss clauses.   

ZALMA OPINION  

Insurers, by carefully writing their policies, have been able to avoid  most mold claims and the resulting litigation after the claim is denied.  Some decided to provide coverage for mold claims but set low limits of  liability while others drafted clear and unambiguous exclusions. Those  insurers have avoided some litigation while most have found the new  exclusions or limitations of liability to allow the insurer to  successfully defend the suits.  

\\xa9 2021 \\u2013 Barry Zalma