Ninety-two percent (92%) of the world's population lives in places where air quality levels exceed World Health Organization (WHO) limits for pollutants, with 3 million deaths per year linked to exposure to outdoor air pollution. However, Indoor Air Pollution (IAP) can be just as deadly. In 2014, WHO reported that in 2012, approximately 7 million people died (one in eight of total global deaths) as a result of air pollution exposure; a finding which more than doubled the previous estimates and confirms that air pollution is the world's largest single environmental health risk. In particular, the data revealed a stronger indoor air pollution link to cardiovascular diseases such as strokes, heart disease, and cancer. According to an article published in the Journal of Environmental and Public Health in 2016, the cost of illness associated with exposures to mold is estimated at $22.4 billion annually just in the United States. An estimated 4.6 million cases of the 22 million people in the United States reported to have asthma are attributable to dampness and mold exposure in the home according to a joint study conducted by Berkeley Lab and the Environmental Protection Agency (EPA). With statistics like these, mold and indoor air quality (IAQ) are a significant commercial risk specifically in places that we live, sleep, and play - habitational buildings such as apartments, condominiums, and low-income housing/homes.

What is Mold?
Mold is a naturally-occurring fungi that can be found almost everywhere and reproduces by means of tiny spores. Invisible to the naked eye, mold floats through outdoor and indoor air and can easily infiltrate buildings. Molds need only moisture and something to "eat" (meaning building content or materials such as wood, paper, carpet, foods, drywall, furniture, etc.) to spread.

Insurance Claims from Mold
Mold is a major concern when discussing exposures and risks regarding Habitational Indoor Air Quality (IAQ). Insurers have seen frequency and severity claims from mold exposures; both from owners and tenants of habitational properties. These claims include bodily injury, property damage, remediation (cleanup costs), and legal expense and defense costs. Here are two large claims examples:

• Mold Liability: $1.25 M+
  Tenants of an apartment complex alleged that exposure to mold impaired their ability to function. Bodily injury claims included headaches, inability to concentrate, and difficulty breathing. The tenant filed a lawsuit. Defense costs were over $1 M and the settlement costs were over $250,000.
• Mold Liability and Defense Costs: $10 M
  Due to mold exposure in a family's apartment, a child suffered an asthma attack and could not breathe. The child was left with brain injuries due to lack of oxygen. The apartment had a serious infestation of mold that the property manager ignored despite months of complaints. The owner was sued due to the child's bodily injury. The suit settled for $9 M and over $1 M was incurred in legal expenses.

Mold and Insurance Exposures
Pollution insurance can help property owners mitigate their exposures to mold. Claims and loss can arise from a variety of sources as noted above via the following liability routes (all with associated legal expense and defenses for investigation of allegations to prove negligence or fault on behalf of the accused party):

• Remediation (cleanup costs): Mold can easily spread to entire buildings through heating, ventilation, and air conditions (HVAC) systems and are often "hiding" behind dry wall or above ceilings due to long-term leaks or exposure to water that have gone unnoticed. Many remediation efforts require professional service providers that meet governmental guidelines for certification (i.e. Certified Industrial Hygienists) to ensure proper and complete remediation which can be costly.
• Bodily Injury: Mold exposures can cause or exacerbate allergic reactions, asthma or other respiratory complaints, including irritation of eyes, skin, nose, throat, and lungs manifesting as hay fever-like symptoms such as sneezing, runny nose, red eyes, and skin rashes. When mold is present in areas where people sleep, live, eat, and play, the effects of such mold on a daily and aggregated basis can cause severe bodily injury (especially in sensitive populations such as the elderly and young children).
• Property Damage: Mold may settle onto a variety of building materials and content and will gradually destroy the things that they grow upon. Once mold has affected the item such as furnishing or drywall, often the only remedy is to completely remove the mold-contaminated surfaces which can result in significant costs for replacement of property that was damaged.

In each of the above exposures, pollution insurance, in conjunction with other risk management protocols and procedures for inhibiting mold growth, can assist owners and operators of habitational properties in managing their liabilities associated with indoor air quality.

Additional Prevention Measures
Controlling moisture is the best way to control mold growth. The following prevention measures are often helpful in inhibiting exposures:

• Fix all water problems or leaks immediately upon identification with property cleaning and drying of all building materials and furnishings within 24-48 hours to prevent mold growth
• Reduce indoor humidity with proper venting of bathrooms, dryers, and other moisture-generating sources to the outside along with use of air conditioners and de-humidifiers

Written by Jamie Langes, Assistant Vice President, and Janice Nunziata, Product Manager, at Tokio Marine Specialty Insurance Company (TMSIC)

This blog post was written as part of the TMSIC Environmental team's efforts to educate on protections and liabilities for Indoor Air Quality. The information contained herein is for discussions and informational purposes and is not intended to be a full disclosure or complete analysis of the liabilities or risks posed to insured(s) in the marketplace. For additional resources and information, please visit the following websites: https://www.epa.gov/indoor-air-quality-iaq; https://www.osha.gov/SLTC/molds/index.html; https://www.cdc.gov/mold/

IMPORTANT NOTICE - The information and suggestions presented by Philadelphia Indemnity Insurance Company in this E-Brochure is for your consideration in your loss prevention efforts. They are not intended to be complete or definitive in identifying all hazards associated with your business, preventing workplace accidents, or complying with any safety related, or other, laws or regulations. You are encouraged to alter them to fit the specific hazards of your business and to have your legal counsel review all of your plans and company policies.