3 Things Landlords Should Know About Mold Claims

2/16/2021 (Permalink)

The best way to prevent a mold lawsuit is to avoid mold damage in your building.

Ways To Protect Yourself From a Mold Claim

In recent years, landlords and property managers have faced an increasing number of lawsuits arising out of mold damage to property. As a result, property managers and landlords have filed more insurance claims related to mold damage. Property and general liability insurers have responded to these increased mold insurance claims by adding specific mold exclusions to their policy language. There are several things that wise property managers and owners should know to protect themselves from exposure to a mold claim.

1. Owner and Manager Obligations
Owners of residential rental property are required by law to keep maintain the property in a safe and livable condition. If they fail to do so, they may be liable to tenants for any resulting injuries or damages. The rules for commercial rental property are similar: While the commercial property doesn’t have to be livable, it must still be fit for its intended purpose. Courts hold property managers to the same standards as landlords, since managers act on the property owners’ behalf.

2. Common Insurance Exclusions
Many mold insurance claims are denied due to specific exclusion language in the policy. For general liability insurance, this exclusion is typically in the form of a “Fungi or Bacteria” rider that says the insurance policy will not cover any damage related to fungi, mold, or bacteria. These riders often exclude coverage for any damage where mold is involved, even if the initial damage was caused by a covered event. Furthermore, most insurance policies specifically exclude coverage for any mold-related expenses, including the cost of mold remediation.

3. Ways To Avoid Liability
Keeping up with property maintenance and avoiding mold damage in the first place is the best way to prevent a mold lawsuit. Owners and managers should also check their insurance policies carefully for exclusion language. There are specific insurance policies available that offer mold coverage.
Property managers and owners who face mold-related lawsuits and whose mold insurance claims are denied could end up paying for damages out of pocket. La Mirada, CA, landlords, and managers should be sure that they have the correct coverage before claims arise.