No jump foreseen in Gulf mold claims.

• Author: Marshall, Jeffrey
• Position: Insurance

One result from Hurricanes Katrina and Rita was a surge in awareness of mold. Commercial and residential areas that were submerged--a common event--developed a serious mold issue in the wet and humid Gulf environment.

Still, that doesn't presage a spike in toxic mold claims, says Dan Lavoie, chief compliance officer at Integro Insurance Brokers, a New York-based firm. For one thing, he says, it's difficult for mold coverage to take precedence over more general liability or flood insurance. "When it comes to the apportionment of liability, it's almost impossible to determine which coverage would respond," he said in an interview. "Typically, liability policies have pollution exclusions, with some exceptions." And while "the environmental marketplace had significant policies in place" in that area, sorting out the claims will be very difficult, he adds.

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Moreover, the issue is far bigger for homeowners than for businesses, he says. Many homes that are still standing in Louisiana and Mississippi have major water damage and may never be repaired, and drywall and wood--the staples of residential construction--are "food for mold," he says. "There's not a lot of usable...