Joe Smith, an insurance agent, received a message to call his customer regarding a "mold" question. He wondered why he received the call. Could it be possible that his customer was reading a recent Florida decision? That court ordered a building contractor to stop making representations relating to the availability of insurance coverage for the work he performed. The court stated:

Without Kodsy's opinion and advice that the insurance policy will cover his services, property owners would likely contact their insurance agent or company to inquire as to whether their policy covers mold removal. If homeowners knew that their policies did not cover mold removal they would be able to make informed decisions on whether to do business with All Restoration Services or consult with other mold removal businesses and compare prices. (Emphasis added) Kodsy v. Department of Financial Services of Florida (2008) 2008 WL 36616.

Since Joe had no further information, he started thinking about what he knew about mold, the questions he should ask his customer and advice he could give regarding sources of information. He considered the scientific support for a mold claim, the potential for insurance coverage for a mold claim and sufficiency of insurer responses to those claims, the latest industry trends to exclude or limit mold coverage and the potential for a claim against an insurance agent for failing to properly explain or provide mold coverage.

SCIENTIFIC SUPPORT FOR MOLD CLAIMS

Joe first focused on what he remembered about mold and the other terms usually discussed in the same context, mildew and fungus. He knew that the terms mold and mildew were often used interchangeably and both were a species within the broader category of fungus. Mold has specifically been held, as a matter of science and law, to be a type of fungus. Board of Education of Liverpool Central School District v. Utica Mutual Ins. Co. (2007) 836 N.Y.S.2d 491.

Of course, mushrooms are also a fungus, and fungi are critical to the breakdown of plant matter in composting. Therefore, he knew it was important to be more specific and to think about the moist conditions that, if allowed to persist, can contribute to the growth of mold as a fluffy or powdery growth on carpet, wood, furniture, sheetrock and most foods.

He also knew that there was a lot of misinformation relating to molds, so to refresh his recollection he turned to the Department of Health and Human Services Center for Disease Control and Prevention ("CDC"). He learned that despite the widespread use of the term "toxic mold" in commentaries, statutes and court cases, the CDC states "The term 'toxic mold' is not accurate." CDC advises that "There is always a little mold everywhere Aca,!aEURoe in the air and on many surfaces." http://www.cdc.gov/mold/stachy.htm.

While Joe knew this might lessen his customer's concern, he also knew that news reports following Hurricane Katrina and the flooding of New Orleans had increased fears regarding the potential for mold infestation. He found out, however, that the CDC states: "No reports of increased fungal infections related to floods in the United States exist." Mold Prevention Strategies and Possible Health Effects in the Aftermath of Hurricanes and Major Floods, CDC, http://www.cdc.gov/mmwr/preview/mmwrhtml/rr5508a1.htm.

Nevertheless, he knew he had a question from a customer so Joe looked to the scientific studies to discover the actual risks associated with mold contamination. He learned that the CDC reports: "For the majority of persons, undisturbed mold is not a substantial health hazard. Mold is a greater hazard for persons with conditions such as impaired host defenses and mold allergies." Id.

Molds can produce beneficial results such as an antibiotic (penicillium) or fungal metabolites that are poisonous to humans and animals. CDC reports, however, that almost all of the known ill effects from mycotoxin (a toxin produced by an organism of the fungus kingdom) exposure are attributable to ingestion of contaminated food. Id.

The literature does suggest that asthma may be aggravated by home dampness but it may not be clear that these conditions cause asthma. Jeroen Douwes and Neil Pearce, Invited Commentary: Is Indoor Mold Exposure a Risk Factor for Asthma? Am. J. Epidemiol. 158: 203-206.

Joe also found out that an earlier study that suggested a particular type of mold, Stachybotrys chartarum, also known as Stachybotrys atra, was associated with acute pulmonary bleeding and other illnesses in children had been discredited by a later study published by the CDC. http://www.cdc.gov/MMWR/preview/mmwrhtml/mm4909a3.htm.

Therefore, while there were legitimate health concerns relating to mold exposure, it did not appear that the dire warnings issued in the past were supported in the medical and scientific literature.

GENERAL BACKGROUND AND THE "CELEBRITY ANGLE" OF MOLD CLAIMS

Joe knew mold was not new. He recalled that Moses had written about mildew and the treatment for it between 1440 and 1400 B.C. The biblical reference is found beginning at Leviticus, Chapter 13, verse 51 and then at Chapter 14, verse 43: