The insurance industry has been alerted to the fact that restoration costs from flood damage this year may be far higher than ever suspected. One reason for this is that approximately 10% of restoration jobs were carried out so poorly they had to be done again. Most of these were the result of contractors not ensuring properties were sufficiently dry before starting work or failing to specify the correct procedures.
Recently, another expensive by-product of post-flooding damp has been given a much higher profile – mould. This is largely the result of a road show by Phoenix-based Aerotech Laboratories earlier this year. In a report, the lab said: “The real concern is when mould becomes established in indoor ventilation systems and carpets, anywhere water accumulates or where water damage has occurred. Once mould has become established, one way spores can spread throughout the building is by the ventilation system.”
It adds that exposure to mould growing in indoor environments has been linked to a number of adverse health effects, such as lethargy, asthma infection, dermatitis and hypersensitive pneumonia.
US experts, led by Dr R Vincent Miller, immediately showed what the bottom line in all this was – increased insurance claims. The antidote is higher standards of restoration work, more testing, more use of labs such as Ameritech – all worthy but obviously self-serving material.
Claims on the rise
Some who attended the road show emerged converted, proclaiming mould to be the new asbestos, that it could be responsible for as many as 3,000 deaths in a year. Datamonitor estimates the numbers of personal injury claims going through each year will rise to more than one million in a few years. Mould-related claims will no doubt be part of this overall rise.
Some of the US cases include a class action brought against the State of Florida by five parents who lost infants due to pulmonary haemorrhage, which involves mould growing on the lungs. The state was accused of poor remediation in the homes they ran. Mould had occurred in a boiler room and had been left unattended, allowing fungi to grow. Spores were then spread through the ventilation system.
During the trial, lawyers noticed there was mould in the court house and started a class action on being forced to work in a dangerous environment. This resulted in the demolition of the courthouse and undisclosed damages.
Another couple bought a new house where, after a few months, the family all fell ill. Mould was found growing in the wall cavities, which had started after water damage years previously. Both the real estate agent and the insurance company are being sued for millions.
Future for the UK
Insurers in the US have been hit hard as the courts impose punitive costs on them because of incompetent contractors who do not totally restore buildings after flood damage. Here in the UK, as yet, the consumer doesn't have the same perception of mould. But our lawyers have shown they are the equal of anyone in the world when it comes to finding grounds for claims.
Much of what is being said are scare stories to try to push insurance companies into paying contractors and damage restoration companies such as Munters to do far more extensive works and expensive testing after any kind of flooding.
For instance, a relatively small leak from a washing machine, which could be cleaned and dried within a couple of weeks, could lead to the insured having to move out. All areas would have to be stripped and air samples taken and analysed, the insured only allowed to move back when everyone was confident that contamination levels were acceptable. It's an expensive business – taking one sample and sending it to a lab for w.coli testing costs £65.
As an industry, we have come to realise that what happens in the US does and will happen here. I am confident that mould is not the “ new asbestos”. But I am also confident we are going to hear a lot more about it.