AUSTIN, TX — The Healthy Indoor Environments (HIE) 2002 conference officially kicked off with a “State of the IAQ Industry” discussion conducted by representatives from the business, political/regulatory, legal, and consumer/insurance sectors.


Tony Warthan of Air Quality Services, Atlanta, GA, said that the IAQ market is very broad, segmented into equipment, products, and services among local, regional, and national markets, and involving commercial buildings, schools, and residences.

He added that estimates of the IAQ market size range from $2 billion to $5 billion annually. “The growth rate is estimated to be over 25% annually,” said Warthan. “But in Texas, for example, there is triple-digit growth.”

Warthan said several forces will affect the IAQ market:

  • Litigation and liability;

  • Media attention;

  • Regulatory activity;

  • The green building movement; and

  • Health or medical concerns (e.g., asthma).

    “There is still a lot of controversy in the market because people don’t attribute health problems to building defects,” Warthan said.

    The mold problem has encountered “explosive growth,” according to Warthan, and the result has been new entrants into the market, expended resources, and an insurance industry that has been staggered by mold claims. He added that there are as many as 60,000 outstanding mold claims in the United States The average mold claim in Texas in 2001 was $50,000.

    “The biggest market challenge is the fact that we are dealing with an evolving market, which requires a crystal ball approach,” he said. “The opportunities are great [because] this is not a maturing market, it is an emerging market.”


    Aaron Trippler of the American Industrial Hygiene Association (AIHA), Fairfax, VA, told HIE attendees that, “I speak to you almost from the position of a policy maker — I have a lot of questions, just like you.”

    He said that the black mold issue has brought the Occupational, Safety, and Health Administration (OSHA) “back into the regulatory arena and they are looking at new standards.

    “This talk reminds me of taking aspirin for a headache,” Trippler said. “It makes the headache go away, but you don’t know what caused it in the first place.

    “If leading experts in black mold cannot come up with definitive answers on health affects, I don’t know how policy makers can have the answer.”

    Trippler cited several states that introduced some type of IAQ regulations. Indiana, for example, has introduced a bill to limit exposure to toxic mold. New Jersey has introduced a bill requiring purchasers or lessees to be informed about mold remediation measures. Illinois has a bill involving IAQ in school buildings, but Trippler said the bill “has not moved at all.”

    He continued, “We want people to be qualified to make suggestions [involving mold testing/remediation], i.e., a certified hygienist must pass competency testing. States have not set any qualifications or minimum guidelines. Testing laboratories need to be accredited and nationally recognized.”

    Trippler added that Rep. John Conyers (D-MI) is planning to introduce a bill in Congress that would target money for IAQ research, create a central clearing house for information, and set

    up certification and training for professionals. (See related story, Page 1.)

    “The bill could be dropped in this month but it likely will not be voted on until next year,” Trippler said. “This is an election year and there are other more important issues.”


    Ed Cross of the law firm of Edward Cross & Associates, Irvine, CA, represents owners of southern California “upscale” homes. He told the audience, “Insurance policies aren’t written for consumers, they are written for their own special reasons.”

    Cross said that the hot topic in insurance policies are mold exclusions. He cited the $32 million judgment in the case of Ballard vs. Farmers Insurance Co. as a main contributor to the new changes to insurance policies.

    “The fine print in insurance policies is often ambiguous,” he said. “If that is the case, courts will rule in favor of insurance companies.

    “Why can’t insurance companies offer a rider? Why can’t insurance companies set premiums high enough to make a profit off of the coverage? Why not make [mold insurance] a product, just like earthquake insurance?”

    Cross said that some policies may have “pollution exclusions,” which raise the questions: Is mold a pollutant or an irritant? Is [the exclusion] applicable to naturally occurring substances? He cited a 1990 Wisconsin decision where the court held that the pollution exclusion did not apply to mold.

    “If exclusion doesn’t work, there may be caps put on damages,” he said. “There will likely be insurance caps in all states by the end of the year.”


    Melinda Ballard is the homeowner from Dripping Springs, TX, who sued Farmers Insurance for bad faith and fraud, and won a $32 million judgment. She is also the founder of Policyholders of America, based in Austin, TX.

    “My case is probably the most misquoted case,” she said. “I am either hated or loved, depending upon which side of the industry you are on.”

    Ballard asked Farmers to live up to the terms of its contract with her family, telling them, “You are at the crossroads; you can either honor your contract or I’ll make stachybotrys a household name.

    “Their response was, ‘What are you going to do, put the story in the Dripping Springs Gazette?’”

    Ballard said there are several “rules of the game” that businesses should stick to when asked to consult with home or business owners:

  • Don’t be an advocate — remain independent. “You aren’t hired to figure out what deductions an insurance company should get — you are a remediation expert!”

  • If restrictions have been put on you, duly note these restrictions in a written report. “You will be dragged into the muck unless you document any restrictions made on you.”

  • Look for problems; don’t minimize them.

  • Produce timely reports, especially if people are still residing on the property.

  • If a property owner requests a report, provide it.

  • Watch your back. “Don’t say anything that you don’t want recorded,” she said. “Many of our members will record testing and remediation without your knowledge.”

    Ballard said she has 17,000 families in her organization. When challenged by her insurance company, “I didn’t go away — I got meaner. I have gone on to be an advocate, not an activist.

    “I am not an advocate for homeowners who want to make this issue a profit center for themselves — they give us a bad name. And I’m not trying to win a popularity contest with insurance companies.”

    Publication date: 05/27/2002