Molding a Consensus -- Pollution Exclusions and Mold Claims

Washington D.C.'s Dave Stratton on his Insurance Defense Blog provides a link to an in-depth article by Los Angeles attorney Jacqueline M. Jauregui on the interaction between mold claims and pollution exclusions. Here are the introductory paragraphs from that article:

Whether mold is a pollutant presents a question of considerable and pressing interest both to insurers and insureds who must deal with general policy forms that lack a mold exclusion but otherwise exclude pollution. Similarly, it poses coverage issues when insurers or insureds must deal with carriers who have incorporated specific pollution coverage without reference to mold losses. The frequency and cost of claims involving species of molds such as stachybotrys chartarum have become so high that insurers with both types of contracts need some certainty on this issue. Unfortunately, common parlance points in one direction while published opinions interpreting the pollution exclusion seem to suggest another. This anomaly creates tremendous uncertainty about the relationship between mold and pollution coverage and pollution exclusions.

To date, only two opinions, have evaluated the question whether mold is a pollutant. Both were decided in federal court at the district court level but both reached different conclusions. Thus, there is scant guidance from the courts on this issue.

With abundant footnotes, the article concludes that mold probably ought to be treated as a contaminant, but that courts may be hesitant as a practical matter to adopt that position. This is a costly issue for insurers, and one that is sure to generate further discussion.

Comments

[Toxic Mould]

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