Does apartment building insurance cover mold damage?

Mold coverage in apartment building insurance is limited at best. Standard commercial property policies either exclude mold entirely or provide a small sub-limit (often $25,000 to $50,000) that is far below the actual cost of a serious mold remediation project. Similarly, general liability policies contain a pollution exclusion that typically encompasses mold because insurers classify it as a pollutant or contaminant. The ISO CGL pollution exclusion (CG 00 01, Section I, Coverage A, Exclusion f) is broadly worded and has been upheld by courts in numerous jurisdictions as applying to mold claims.

For meaningful mold coverage, apartment owners should consider a pollution liability policy that specifically includes mold among its covered pollutants. These policies cover the cost of mold investigation and testing, remediation and removal, repair of damage caused by the mold, temporary relocation of affected tenants, and third-party bodily injury claims from tenants alleging health problems due to mold exposure. EPA guidelines on mold remediation in schools and commercial buildings provide the framework most remediation contractors follow, and some states (such as Texas under the Texas Mold Assessment and Remediation Rules, 25 TAC Chapter 295) have enacted specific mold assessment and remediation licensing requirements.

Prevention is also critical. Regular inspection for water intrusion, prompt repair of leaks, adequate ventilation in kitchens and bathrooms, and proper maintenance of HVAC systems all reduce the likelihood of mold problems. Documenting these maintenance activities can also help demonstrate diligence if a mold-related claim is filed.