However, after mold damage and insurance coverage (or lack thereof) gained
heightened attention because of various
successfully filed lawsuits against insurers,
standard language was revised to exclude
coverage for “fungus,” wet and dry rot, and
bacteria. Fungus is defined as, among other things, mold or mildew and any “
myco-toxins, spores, scents or by-products produced or released by fungi.” The exclusion
does not apply if the fungus results from
fire or lightning and to the extent that
coverage is provided under the additional
coverage for “fungus” when caused by a
peril other than fire or lightning.
This mold exclusion applies to mold
that might develop as the result of windstorms such as tornadoes. It also limits
coverage for mold that develops as a result
of other moisture-related losses, such as
water leaks that are hidden from view.
4/22/13 9:58 PM of coverage to a specified dollar amount hat is listed on the form, deleting any un- certainty pertaining to whether and how much coverage exists for resulting mold amage. Insured property limits are avail- able only when the direct cause of loss leading to the mold is fire or lightning. Other insurance policies may avoid coverage for resulting mold damage entirely by structuring their exclusionary
language to include anti-concurrent causation language. Anti-concurrent causation language is used to exclude loss
caused directly or indirectly by fungi or
mold regardless of whether any other covered cause of loss contributes—either concurrently or in any sequence—to the loss.
In other words, with this type of exclusionary language, there is no coverage for mold in any amount, regardless
of whether it was the result of a damage
such as that caused by a tornado. This
language has been upheld in numerous
jurisdictions. Policyholders with this type
of language may simply be out of luck for
any mold remediation coverage.
Such was the case in a 2010 North
Carolina case, Builders Mutual Insur-
In areas of widespread destruction, it can be difficult
to quickly clean up and dry out affected items
because of the sheer preponderance of damage within
the area of the catastrophic windstorm.
This change in language confirms that
there is coverage for mold damage if it
develops as the result of a covered cause
of loss, such as a windstorm or explosion.
However, the language limits the extent