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The development of standards will assist risk managers, underwriters, brokers, claim adjusters and attorneys in addressing mold problems that they encounter.

Mold has been around for more than 2,000 years, but its effects on indoor air quality, and public health in general, only recently have received widespread attention.

In past few months, the public has been bombarded with news about mold large verdicts as a result of mold claims, insurance companies' attempts to create new exclusions to address mold problems and states holding public hearings on mold. Problems associated with mold have a far-reaching effect and can potentially affect houses, public buildings and the workplace.

State and federal regulations have not yet addressed the effect of mold on indoor air quality, and there is a lack of agreement between medical experts about what type of mold is harmful to humans and in what amount. But guidelines are being developed.

A Need for Standards

Once standards to deal with mold are put in place, insurance professionals will be affected on several fronts. For the risk manager, standards may provide a means to detect or prevent mold problems from occurring. And when mold problems do occur, having standards in place would give risk managers a method to control damages, assess likely insurance recovery or reduce exposure to litigation.

For an underwriter, mold-related standards could offer guidance in asking pertinent risk-related questions about mold occurrences or potential. An underwriter for an errors and omissions policy for a remediation company, for example, would want to know about the standards required for the remediation work as well as whether the remediation company adheres to those standards. Brokers, too, would be interested in these answers--both from their clients' perspective as well as from that of the industry as a whole.

A first-party claim adjuster would want to know what standards are reasonable to follow when he receives notice of a claim calling for a prompt response. Such standards may affect coverage determination and the selection of an appropriate safety or remediation professional. Standards also will help an adjuster assess how much cleanup is necessary. Some of a third-party adjuster's concerns will overlap with those of the first-party adjuster, but the third-party adjuster also will refer to set standards to assess the value of a lawsuit and the insured's potential exposure for having caused property damage and bodily injury. The adjuster also will evaluate the strength of his case, depending on which experts are permitted to testify at trial.

Without a set of agreed-upon standards, litigating attorneys may have trouble determining cause, establishing a remediation plan, assessing damages and proving that an illness was caused by mold. For instance, proof is required to show that mold--as opposed to another variable--is to blame for the alleged damage or illness.With negligence cases, a claimant must prove that the responsible party failed to conform to some accepted standard of care, which caused the damage alleged. These problems may be amplified where courts are reluctant to permit expert opinion testimony about subjects that have not yet gained substantial recognition in the scientific community, based on Daubert vs. Merrill Dow Pharmaceutical, 509 U.S. 579 (1993) and similar cases.

Few Existing Guidelines

Most molds are not toxic. But some are believed to be toxic and are blamed for causing serious health problems, particularly if presented in large quantities. Standards relating to toxic substances typically include guidelines on preventing the problem in the first place, testing and measuring the presence of the substance, remediating the problem and monitoring the situation to prevent reoccurrence. But unlike other high-tech toxic substances that have inspired elaborate standards, guidelines for coping with mold are mostly in the developmental stage. As more attention has been focused on mold, ongoing research and commentary by professionals have come to the forefront, resulting in evolving guidelines, some of which have gained broad acceptance.

Few states regulate indoor air quality, and those states that do typically don't address biological components, such as mold. The few regulatory guidelines in place have not determined what types or levels of mold are acceptable or unacceptable in an indoor environment. States with some of the more significant mold problems are continuing to provide guidance to the public, although frequently in very general terms. For example, the California Department of Health has published guidelines on indoor air quality, and the Minnesota Department of Health has fact sheets addressing mold issues, including one on managing water infiltration into buildings and remediation of such problems. (See "Mold Information on the Web".)

State legislatures and local governments also are beginning to address mold issues, although the creation of effective legislation is still a long way off. Additionally, there are several trade groups that have established guidelines, which have gained acceptance in connection with mold problems. But there is still a lack of scientific and medical data to help the public and private sectors determine which molds pose health dangers.

Remediation and Assessment

Standards for remediation and assessment, however, do exist. These standards provide insurance professionals and the public with information to determine which experts are qualified to remedy and assess mold problems. They also offer a basis to determine what conditions should reasonably exist in the nonsterile indoor environments in which we live and how to achieve those conditions.

The Environmental Protection Agency has supported indoor air-quality initiatives in many forms and has developed guidelines that address mold problems in schools, commercial buildings and homes.

The most recent of the EPA's guidelines, "Mold Remediation in Schools & Public Buildings," published in March 2001, deals with issues including prevention, investigation, evaluation and remediation of mold problems. The EPA guidelines discuss common-sense approaches to water-damage cleanup and prevention, remediation approaches depending on the size of the area and location of the mold, sampling and monitoring. The guidelines also state that health professionals may need to be contacted and professional assistance in the cleanup effort may be necessary. One EPA publication, "Indoor Air Quality Tools for Schools," contains a section dealing with professional assistance, including evaluating potential consultants.

In 1993, the New York City Department of Health and the city's Human Resources Administration, along with a local hospital's occupational health clinic, convened a panel to develop policies for medical and environmental evaluation and intervention to address mold contamination. The result was "Guidelines on the Assessment and Remediation of Fungi in Indoor Environments," published in 2000, which addresses mold contamination of building components that are chronically moist or water damaged.

While these guidelines are not meant to be a substitute for the expertise, skill and knowledge of other trained professionals, they are widely used in dealing with mold issues by experts throughout the United States.

The text, Bioaerosols--Assessment and Control, edited and published in 1999 by the American Conference of Governmental Industrial Hygienists, contains widely accepted guidelines for assessing mold conditions. While older documents exist and have been used by professionals dealing with the remediation and assessment of mold in the past, advances in the subject have required professionals to focus largely on newer information and techniques that continue to develop.

Safety professionals--typically industrial hygienists or environmentalists--caution against having remediation contractors begin remediation or provide remediation proposals until a safety professional has thoroughly assessed a mold-contaminated location. With that caution in mind, however, there are also trade associations of remediation contractors that are developing standards for remediation. For example, The Institute of Inspection, Cleaning and Restoration Certification in 1999 published the S500 Standard and Professional Water Damage Restoration, 2nd edition. Certification programs also are being considered by some remediation contractors.

Other Standards

With respect to indoor air quality in general, the American Society of Heating, Refrigerating and Air Conditioning Engineers developed standards in 1989 addressing ventilation, resource management and air cleaning that were intended to be used to achieve an acceptable indoor air quality. Since the growth of mold is affected by humidity and air circulation, the society established standards for ventilation design, operation and maintenance. The society also defines what is acceptable air quality, although the definition is dependent on the minimum indoor air-quality standard set by governmental agencies. The society's standards have been incorporated into some state and local building codes.

State and local health agencies also may provide information and guidelines on addressing mold problems. But, with few exceptions, statutes have not been enacted addressing specific standards for elimination of harmful molds, so enforcement is absent. In San Francisco, however, the city's Board of Supervisors enacted Section 581 of the San Francisco Health Code, which makes it a nuisance to have visible or other demonstrable growth of mold or mildew in the interior of any building or facility. While violation of the code could result in a fine, what constitutes actionable levels of mold and mildew is not yet clear.

Many health agencies provide general information describing what mold is and that contact with mold should be avoided. Health departments are likely to be called on in the near future to formulate standards and conduct sufficient research to set minimum standards indicating what molds are harmful and in what amounts--or in other words, what is acceptable indoor air quality.

There are virtually no known building codes addressing the prevention, remediation or repair of mold-infested buildings. Current codes address only the deficiencies that allow water to enter the building in the first place. In 1994, the Occupational Safety and Health Administration proposed regulations dealing with indoor air quality that would have addressed, among other issues, control of microbial contamination in workspaces. These, however, have not been finalized. While various departments of occupational safety in different states may address indoor air quality, mold typically has not been the primary focus of attention.

Legislation Pending

Legislation is on the drawing board in several states to begin the process of establishing standards to address mold issues. In Texas, two House bills (HB 2006 and HB 2007) deal with mandatory air-quality tests and standards for new or substantially renovated schools or ones that have been subject to events, such as floods, likely to produce air-quality problems. Unfortunately, the 2001 legislative session ended with these bills still in committee, so they will need to be reintroduced at the next legislative session.

In California, three pieces of legislation deal with indoor air quality and mold. One of those bills, Senate Bill 732, was approved Oct. 5 by Gov. Gray Davis. Intended as a comprehensive Toxic Mold Protection Act, SB 732 seeks the development of standards for exposure, identification and remediation of mold. But those standards are not expected to be developed until sometime after July 2003.

Davis also recently signed SB 284, which requires the state's Department of Health to educate the public about adverse risks linked to mold. And SB 178, which is still pending in the California Senate, provides additional safeguards to tenants who reside in mold-infested rental properties. Both bills are likely to rely on standards that will be established pursuant to SB 732.

Given the diverse types of problems that can be presented by mold, the absence of agreed-upon standards will continue to present a challenge for insurance professionals and their clients. While established regulations or agreed-upon standards for remediation and cleanup may not be far off, standards that rely on a health determination of how much and what kind of mold is too much will take considerably longer to develop, since scientific and medical testing and development of such standards are still in their infancy.

In the meantime, public awareness and response to mold issues have been prompt and strong. Until regulations are enacted addressing what type and how much mold is harmful, the question of what the proper standards are will continue to be debated.

" The California Department of Health has published guidelines on indoor air quality at www.cal-iaq.org. The department's Indoor Air Quality Info Sheet can be found at http//www.dhs.ca.gov/ps/dcdc/pdf/mldfaqpp.pdf.

" The Minnesota Department of Health has fact sheets addressing mold issues, including one on managing water infiltration into buildings and remediation of such problems at http//www.health.state.mn.us/divs/eh/aialr/iair/index.html.

" The Environmental Protection Agency has supported indoor air quality and has developed guidelines that address mold problems in schools, commercial buildings and homes. For more information, see "Mold Remediation in Schools and Public Buildings" (www.epa.gov/iaq/molds/index.html), "Biological Pollutants in Your Home" (www.epa.gov/iaq/pubs/bio_1.html), "Indoor Air Quality Tools for Schools" (www.epa.gov/iaq/schools) and "Indoor Air Quality in Large Buildings" (www.epa.gov/iaq/largebldgs).

" The New York City Department of Health and the city's Human Resources Administration, along with a local hospital's occupational health clinic, published "Guidelines on the Assessment and Remediation of Fungi in Indoor Environments" (www.ci.nyc.ny.us/html/doh/html/epi/moldrpt1.html).

Joann Selleck is a member in the San Diego office of Cozen O'Connor. Her practice includes insurance coverage and bad-faith litigation, subrogation and commericial litigation.

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