Distinguishing Between Water Damage & Mold on Environmental Claims

Mold conditions are one of the most frequent pollution claims tendered to insurance companies. These claims can vary in complexity, and losses vary from low to high cost severity. Oftentimes, water damage expenses are incorrectly claimed as pollution expenses. In our experience, the earlier an insurer can be involved in a mold evaluation, the easier it is to weigh in on what qualifies as a mold expense versus those solely defined as water damage.


Claims involving mold and water damage are especially relevant now as a result of COVID-19 shutdowns. Many schools and businesses have temporary closed, which can result in unchecked moisture and mold conditions. Facilities are likely short-staffed and therefore not able to provide the necessary checks to prevent water leaks or maintain HVAC operation to control moisture levels in buildings. Some facilities may be shut down entirely (including HVAC operation) to save on operating costs, resulting in elevated moisture conditions. Elevated moisture and unchecked water leaks can, and often do, cause and amplify mold inside buildings. The following recommendations and reminders to insureds can help prevent mold amplification at facilities:

  • Control humidity levels
  • Thoroughly clean and dry areas after water intrusion
  • Ventilate areas of high humidity
  • Keep humidity levels between 30% and 50%
  • Use an air conditioner or dehumidifier during humid months
  • Monitor and repair leaks at the facility

Mold requires both a food source and moisture to grow. Building materials are generally a good food source for mold, so proper building maintenance and moisture control are critical to prevent mold amplification. As schools and businesses resume operations and occupancy, elevated moisture conditions and unchecked water intrusion will likely be discovered and may result in mold amplification at these facilities, resulting in environmental claims.


Once a mold condition is noted and the insurer is notified of a claim, it’s helpful for insurers to have vendors in place that can respond quickly to evaluate the loss. This includes identifying the cause and origin of water intrusion and/or mold amplification as well as separating costs for water damage vs. mold. This work can be performed through site visits and/or document reviews and can result in significant cost savings to insurers, since water damage is typically covered by an insured’s property carrier while mold remediation is specific to the policies covered by their environmental carrier.


For more information on this subject or to ask a question about a mold claim, please contact us.

Additional Resources

Environmental Protection Agency (EPA)

“Mold Moisture and Your Home”

“Mold Remediation in Schools and Commercial Buildings”


Occupational Safety & Health Administration (OSHA)

“Indoor Air Quality in Commercial and Institutional Buildings”


American Society of Heating, Refrigerating & Air-Conditioning Engineers (ASHRAE)

“Indoor Air Quality Guide”


New York City (NYC)

“Guidelines on Assessment & Remediation of Fungi in Indoor Environments”


Centers for Disease Control & Prevention (CDC)

Multiple resources

Sergio Honl

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