Some commentators on the mold issue compare it to the situation that insurers continue to face regarding asbestos. But does it have to be that way? While there are striking parallels, there are also significant differences.
Perhaps the first thing to remember is that man has contended with mold for thousands of years. In fact, there are common sense instructions on remediating “mildew” in the Bible’s book of Leviticus, written nearly 3,500 years ago. They read remarkably like the recommendations of present-day remediation experts: clean it up and get the contaminated materials out; if it keeps spreading after that, the building might have to be torn down and the materials disposed of.
Secondly, the convergence of several factors has pushed this issue to center stage. Consider the following: increasingly energy-efficient buildings trap moisture within, helping mold to thrive. Aggressive plaintiff attorneys use the lack of scientific information regarding health effects of mold to maximum advantage. The news media spotlight sensational examples such as a home infested by a rare species of mold being demolished by fire rather than through more conventional means. Under these conditions, actual as well as questionable mold claims are easily blown out of proportion.
The landscape is now dotted with plaintiff attorneys, testing and remediation companies, and even expert witness services that have formed to specialize in mold. A whole economy has sprung up to capitalize on this issue. The insurance industry appears to be an easy source of income, which has led many to say that mold will rival asbestos as a massive tort issue.
However, the mold issue is still in its infancy, and the asbestos analogy is not a foregone conclusion. Let’s examine some facts regarding asbestos and mold and then consider a third alternative.
Asbestos is a mineral that was used in insulation and fire-retardant products. Long-term breathing of its fibers has been shown to lead, after a long latency, to asbestosis and mesothelioma, an inoperable form of cancer. Asbestos product litigation has grown to rival environmental litigation as the most expensive mass tort issue in history, driving such stalwarts of American industry as USG (United States Gypsum), Armstrong World Industries and Owens Corning into bankruptcy.
Mold, on the other hand, is a naturally occurring, living organism. It exists virtually everywhere and is a necessary part of the ecosystem. It makes life-saving medicines, such as penicillin and cyclosporin, possible. It even makes some of the finer things in life, like blue cheese and beer, finer.
According to experts, mold needs moisture, a food source and a cool-to-moderate temperature in order to thrive. While mold is nearly impossible to eliminate, it can be controlled. Usually, a bleach solution is sufficient to kill active mold when caught early. Eliminating at least one of its needs (usually moisture) will prevent mold spores from becoming active again. Indeed, controlling moisture is often the key to prevention of mold problems.
Human reactions to molds vary greatly from individual to individual. According to the experts, adverse reactions to a mold usually subside quickly when an individual is removed from the area that contained the mold. Usually, such reactions are allergic in nature, only rarely becoming serious. Just as severe human reactions to mold are rare, molds that can be considered toxic are also rare.
Now, let’s consider radon as a third alternative. Radon, like mold, is naturally occurring, although it is a gas. Twenty years ago, radon burst onto the scene as a major cancer threat. Media coverage first helped to stir up near-hysteria, then helped to spread the word that radon could be controlled. Today, consumers are aware of radon, there are tests for it, and it can easily be vented outside if it seeps into the basement. Radon ventilators can be built into houses during construction at little additional cost and can be retrofitted to existing houses at a reasonable cost. Radon is not an insurance controversy.
So which path will mold follow as a public issue? Society has yet to choose. Insurers see all the effects of mold: property damage, health effects, remediation and prevention. The industry can insist on thorough scientific research and help to educate lawmakers and regulators so they can make sound public policy decisions based on facts, not assertions.
Insurers have an opportunity to be leaders, using their considerable experience to help focus the public policy debate. The industry must take action in the public policy arena so that the mold issue becomes another radon, and not another asbestos.
Dave Golden is director of commercial lines at the National Association of Independent Insurers. Prior to joining NAII, he had extensive experience in insurance company underwriting, marketing and management.
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