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Understanding Commercial Mold Coverage

12/23/2020 (Permalink)

Commercial Insurance Having commercial insurance is crucial for protecting your business

Understanding Commercial Mold Coverage

Having commercial insurance is crucial for protecting your business in Prairie Village, KS, but when it comes to mold and fungus, the policy coverage can be perplexing. Contacting your insurance carrier for clarification is always recommended, but even then, the policy can still be confusing.
Most policies contain a broad fungus exclusion that limits the conditions under which mold is covered through the following exceptions:

  • There is a specified cause of loss that resulted from fungus or mold
  • The mold was caused by lightning or fire
  • Mold or fungus that was caused by something other than fire or lightning and is clearly specified in the Limited Fungus
  • Clause of your policy

How does the Limited Fungus Clause of your policy work?
The circumstances under the Limited Fungus Clause can vary with different commercial insurance providers and the details will be specified within your own policy. In general, the three following items are covered:

1. Removing and Replacing Property for Fungus Removal
The cost of removing and replacing any part of your property to access the fungus for removal. If a leaking pipe is causing mold damage in your building and parts of the wall need to be torn out to access the leaking pipe even though no mold is visible on the wall, mold insurance will cover the cost of tearing out and replacing the wall

2. Damage or Direct Loss to Covered Property
If there is damage or physical loss, the cost of removing and replacing the property is covered, along with the costs for removing the mold. For example, the costs for using a commercial mold removal and remediation service are covered.

3. Mold Testing
After repairing and restoring your building and the fungus has been removed, insurance covers testing to ensure the mold has been eliminated.
Commercial insurance can be unclear, and it is always a good idea to contact your insurance provider to get clarification on specific coverage under your policy. Understanding what is included, particularly under the Limited Fungus Clause, will help you take the appropriate actions to protect your business.

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