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The war against mold

Mold-related lawsuits and escalating insurance premiums are threatening the pocketbooks of America's Building Teams, but the good fight goes on

January 01, 2003 |

Largely ignored by professionals in the design and construction industry as recently as five years ago, mold is now the focus of countless industry seminars, research studies, and magazine articles. And with good reason, as damages from mold hit the pocketbooks of Building Teams across the country.

Fueled by media reports and a growing number of lawsuits and insurance claims nationwide, the mold scare has snowballed into a mess that only a lawyer could love. Building occupants are suing owners, owners are suing contractors, and contractors are suing designers and product manufacturers.

"Mold has grown into a big business," says Ted Bumgardner, vice president with San Diego-based construction consultant Gafcon Inc., which is also involved in construction-related defects litigation. "Five years ago, we rarely saw a mold claim. Now it's rare to find one without mold."

Smack dab in the middle is the insurance industry, which has taken the brunt of the financial blow stemming from mold. According to the Insurance Information Institute, mold-related claims for commercial buildings alone in the U.S. increased from $34 million in the first six months of 2000 to $157 million during the same period in 2001.

Naturally, the insurance industry has gone into the defense mode to protect itself from escalating loses from mold claims. Many carriers now have expressly stated mold exclusions in their general liability policies, which typically protect Building Teams from legal troubles. In some cases, mold is not even a buy-back exclusion, meaning that the customer cannot pay extra to add mold coverage to the policy. In other cases, insurers offer mold coverage at a premium, such as a special endorsement to a pollution liability policy.

What this means for Building Teams is the prospect of limited insurance coverage, higher insurance premiums, and the risk of being named in the latest multi-million toxic mold lawsuit.

Is mold out of control?

Bumgardner believes that while many mold claims may be legitimate, the whole mold scare is getting a bit out of hand, especially with so little scientific evidence linking mold to the negative health effects cited by plaintiffs in mold litigation.

"You can always find a so-called expert out there with whatever opinion you want to advance," he says. "They go into a building, find a little water entry and a some evidence of mold, and before you know it the entire building has to go under negative air pressure, everyone is wearing Tyvek suits, and the place has to be ripped apart. It's just ludicrous."

Damian Wach, an architect and vice president of environmental and engineering consultant EMG, Hunt Valley, Md., would agree with that assessment. But he insists that drastic steps are often necessary to protect his clients — building owners — against litigation.

To cite one example, Wach details one of his firm's latest encounters with mold. During an inspection of a 1930s multifamily building in New York City, EMG found mold in several exterior walls. Condensation on uninsulated horizontal chilled water pipes supplying fan-coil HVAC units in each room caused the surrounding plaster to get wet, and mold grew in several spots.

"Three years ago, we probably would have told the owner that he has a little bit of a moisture problem and recommend that the problem pipes be insulated," says Wach. "But now, because of the possibility of a lawsuit by a tenant, the buyer is spending approximately $200,000 to rip out 18 inches of plaster along every wall and insulating all the pipes."

As a result of growing mold-related litigation, EMG now offers mold inspections as a standard service (along with examination for asbestos, lead-based paint, radon, etc.) to owners of commercial and institutional buildings. Of the more than 2,000 mold assessments the firm has conducted since last June, about 10% have had some type of mold problem, says Jeff Boggs, EMG's director of environmental and industrial hygiene services.

Boggs says ASTM International (formerly American Society for Testing and Materials) is about a year away from establishing standards for assessing buildings for mold, so EMG has set its own benchmark for now.

The Centers for Disease Control and Prevention and the Environmental Protection Agency have created guidelines for mold assessments and remediation, and states such as California and New York passed legislation to establish similar guidelines (see related sidebar, page 48.)

On the horizon — albeit far away — is the establishment of permissible exposure limits for toxic mold. California is leading the way with its Senate Bill 732, but lack of state funding has delayed the creation of a task force to explore the possibility of creating and adopting limits. Even when the task force convenes, many experts believe creating such limits will be a near-impossible task, since the amount of exposure that causes illness can vary tremendously, depending on location, time of year, humidity, specific organism present, and an individual's sensitivity to airborne toxins and allergens.

Staying positive under fire

As insurance companies scramble to react to the growing number of mold-related claims, many in the design and construction community are rallying the troops to attack mold head-on.

"We now cover [mold] on virtually every project," says David W. Altenhofen, chief of architectural technology with Philadelphia-based architect/engineer Kling. Altenhofen says it's a matter of proper design and construction, and educating owners on the importance of keeping the building dry.

For instance, he says the firm recommends to owners that buildings be designed with a rain-screen wall system to ensure a moisture-tight seal.

Proper HVAC design is also crucial, according to David Odom, vice president of CH2M Hill, Englewood, Colo. Considerations include proper building pressurization, ventilation, dehumidification, and filtration.

Stocking the arsenal

Specifying the right materials for the Building Team's armamentarium also comes into play. The growing concern over the invasion of mold has spawned a new market of so-called "mold-resistant" materials and products. Some are considered innovations in moisture protection and mold fighting, while others are simply tweaks of existing product lines.

Altenhofen is skeptical about a few of these allegedly mold-resistant products. "Some companies are piggybacking on the fears of an industry that is grappling with this new problem," he says.

Other products seem more promising, especially when they have been proven to work in different applications, says Altenhofen. He points to wallboard products that feature synthetic glass-mat facing instead of traditional paper facing, which mold likes to feed on.

This type of product has been used for years in projects where an aggressive schedule forces the contractor to begin interior work before the building is fully enclosed, therefore leaving the interior material exposed to the weather. Building Teams spec this type of product because traditional drywall falls apart when it gets wet, says Altenhofen.

Some wallboard companies have taken that moisture-resistant formula one step further. For instance, Georgia-Pacific's DensArmor line combines a glass mat facing with a gypsum core that contains reduced amounts of organic materials.

Similarly, major suppliers like Armstrong and USG now offer ceiling tiles that incorporate mold inhibitors. Armstrong's HumiGuard panels are coated with paint that contains a fungicide. USG's Astro ClimaPlus tiles are applied with AEGIS MicrobeShield from Dow Corp. to offer resistance against mold and mildew.

Altenhofen also is high on anti-microbial coatings that prevent the growth of mold, mildew, fungus, and bacteria. One such product is a silver ion-based surface coating manufactured by AgION Technologies, Boston. The AgION compound was approved by the EPA in May 2001 for use in HVAC applications. AgiON has since teamed with AK Steel, Middletown, Ohio, to offer anti-microbial HVAC ductwork.

Other anti-microbial coatings, such as Alistagen Corp.'s Caliwel calcium hydroxide formula, can be spray-applied to virtually any surface. The company is awaiting EPA approval.

The EIFS industry, which has been named in numerous mold lawsuits during the past several years, has also made strides in improving moisture resistance with improved air and moisture barriers, and even drainable wall systems.

Drilling the troops

Major construction-related associations are taking steps to educate and protect their members, their members' clients, and building occupants from mold and mold litigation. In March, the Associated General Contractors of America established a mold litigation task force consisting of approximately 20 member companies.

Their first task, according to AGC General Counsel Michael E. Kennedy, will be the publication later this year of an educational booklet designed to help building owners, contractors, and designers "sort through the many mold issues in a fairly reasonable and systematic way."

Talking through mold concerns right at the preconstruction phase is crucial, but Kennedy insists that controlling moisture intrusion is a total Building Team effort, and that no single team member can do it all.

The mold equation, he adds, has at least four parts: design, construction, operation, and maintenance. All are equally important.

"As a general rule, the risk allocations should follow the lines of responsibility," he says. "Contractors have to accept that responsibility for workmanship and for material handling; design professionals for the design of the envelope and any role they may play in the selection of materials; and owners for the operation and maintenance."

The American Institute of Architects is looking to team with a government building sciences organization (yet to be announced) to establish mold expertise at the local level.

"We need to emphasize the local climate conditions and how they affect the exterior wall construction," says Altenhofen, who chairs the National AIA Building Science Committee.

Owner organizations, such as the National Multi Housing Council (NMHC), based in Washington, D.C., have added mold to the top of their political action agendas, urging federal and state governments not to jump the gun with mold legislation before proper scientific study can take place. (See related sidebar, page 48.)

In July, NMHC joined forces with the National Apartment Association to testify before the House Subcommittee on Housing and Community Opportunity. The joint group recommended that Congress establish public health guidelines for mold exposure; encourage construction and engineering guidelines to prevent excessive moisture in buildings; and establish a federal panel to explore solutions to the current crisis in mold insurance coverage.

No guarantee of victory

Let's face it: Mold is here to stay. Mother Nature will see to that. So the war against mold will go on.

That doesn't mean you should surrender to the dreaded organism. Just make sure to protect your flank.

"No contractor should be asked to guarantee or warrant that a building is free of mold, because no firm can satisfy such a warrant," says the AGC's Kennedy. "The minute people start walking in and out the doors, there will be mold spores in the building."

In large measure, says Kennedy, "construction is the business of risk management." If he's right, mold becomes another risk you and your troops on the Building Team will have to combat.

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