Mold: New Business Dream Or Liability Nightmare?
On the one hand, homeowners and building occupants claim adverse health effects from exposure to toxic molds. On the other hand, insurance companies cry foul, saying that mold poses no real danger beyond driving up insurance costs.
Many mold remediation companies are making millions. But every day, mold remediators are being sued and forced out of business. Who can make sense of all this conflicting evidence?
LOOKING AT THE FACTSFact: Many experts agree that most molds are not dangerous. The Center for Disease Control says that if you have visible mold growing in your home, it should be removed. If there is no danger, why remove it?
Fact: Molds that are not dangerous to the general population can cause severe allergic reactions in sensitive individuals and dangerous infections in persons with compromised immune systems. Mold colonies growing indoors can cause eventual breakdown of the building structure. Prolonged exposure to even benign molds can cause people otherwise without allergies to develop sensitivities, leading to unpleasant and sometimes serious symptoms.
Fact: Insurance costs are rising. One major insurance company claims it is spending $1.60 for every $1.00 it takes in water damage premiums. Another says it is paying $1.76 on the dollar. Whether or not these figures are inflated, insurance company ceo’s and stockholders will not put up with loss statements like that for long.
Probability: Most likely, premiums will go up, coverage will go down. Texas insurance commissioner Jose Montemayor proposes capping coverage for water damage in homes to $5,000.
What does this mean for the insured?
INSURANCE RAMIFICATIONSAny home with any small leak will likely collect the limit for its losses, need it or not, and a home with a legitimate large water intrusion will have completely inadequate coverage.
Fact: Insurance companies report average payouts of $45,000 to $55,000 per claim. Reputable remediation companies report job averages of closer to $12,000 per claim.
Why the wide variance in cost? In this unregulated industry characterized by lack of education, training, and standards, anyone can call himself a mold remediator. Anyone with a printer can issue a certificate saying “Certified Remediator.”
Fact: Contractors following improper procedures not only do not adequately remove the molds, but they can actually exacerbate the problem by spreading contamination.
Because of the shoddy workmanship and lack of training for some mold remediators, insurance companies are often paying for the same job twice and three times in an effort to get it done correctly. But it’s not only the contractors who are behind on the education curve.
Many consultants, undertrained and wary of litigation, are recommending extensive (and often unnecessary) removal of the structure. Insurance adjusters are unable to keep proper tabs on projects, which stretch into months when they should take days. Indecision, delays, and inadequate containment protocols are the norm; aggravated contamination and lengthy hotel stays for the building occupants are the expensive results.
So, is it worthwhile to jump onto this litigation-driven, unregulated industry bandwagon? The answer is a resounding (albeit conditional) yes. This is big-money business, in large part because it is risky business.
ENTERING THE FIELD OF MOLD REMEDIATIONThe good news is, if you invest time and attention towards adopting a few standards before you begin work, you can avoid the risks and reap the benefits. If insurance companies and homeowners look at these same criteria before choosing contractors, they’ll find they can get the job done efficiently and at reasonable cost. Here are seven suggested steps for jumping on the bandwagon:
1. Have a focus. Dedicate your company or at least a division to mold. Remediation is an industry specialization, not sideline or seasonal work, and employees need thorough training and the opportunity to develop a body of experience on the job. In addition, specialized equipment is required and must be decontaminated between jobs to avoid cross-contamination issues.
2. Don’t be the fox watching the henhouse. At first glance the company who does it all, (drying, testing, remediation, and build-back), would seem to be a client/adjuster’s dream. However, insurance companies have learned expensive lessons and are shying away from setting up potential conflicts of interest in these areas:
3. Cover your behind. Insure, insure, insure. Think worst-case scenario, triple it, add two shakes of paranoia, then insure for that. Enough said.
4. Get trained. Find a good mold school. Make sure it offers complete safety, communication, regulatory, legal, and procedural training, and make sure the class is small enough for you to get personal attention and hands-on experience. Get certification in related fields (asbestos abatement, hvac systems, etc.).
Learn as much as possible about mold, water damage, and indoor air quality issues. Take any continuing education course you can find. Join an industry organization. The International Association of Mold Remediation Specialists (IAMRS) is a new nonprofit organization devoted to promoting competence and quality in mold mitigation and remediation, developing industry standards, and supporting its membership through education, training, networking, and certification.
5. Have a plan. Develop a standard operating procedure (SOP) that covers safety protocols, OSHA and HAZCOM requirements, documentation standards, and complete, detailed work procedures. Develop a contingency plan for every foreseeable circumstance. Having this SOP gives your client confidence in your ability to remedy problems and helps ensure that you are ready to handle whatever comes up.
6. Cover your behind — in writing. Document, document, document. Doing a good job is not enough. You must document in rosters, logs, correspondence, photographs, videotapes, etc. — before, during, and after work. As your lawyer will happily tell you, if you didn’t write it down, it didn’t happen.
7. Know what your job is (and what it is not).
Do: Take customers’ concerns seriously. Don’t: Create or add to panic. There is enough real need for remediation without creating fear through your advertising or other communications with clients.
Do: Act quickly, responsibly, and cautiously. Don’t: Give medical or scientific advice. You are not a doctor or microbiologist.
Do: Refer clients to appropriate experts or expert documents (even if you think you know the answer). Do: Remove mold according to lab criteria and/or specified scope of work. Don’t: Try to solve the whole building problem yourself (you are not Superman).
Following these basic guidelines and spending the time and money to thoroughly educate yourself on mold issues and remediation techniques can promise you a lucrative and limited-risk future in this exciting new industry.
Publication date: 01/28/2002