Magazine article Risk Management

Media and Mold Exposure

Magazine article Risk Management

Media and Mold Exposure

Article excerpt

Mold, despite all the fuss, may be much ado about nothing. Dr. Jack Snyder, the president-elect of the American College of Legal Medicine testified to the Texas Department of Insurance that "current speculation that the mold found in the nation's homes, schools and workplaces represents a significant public health problem cannot withstand even the most rudimentary medical and scientific scrutiny." The Texas Medical Association's Council on Scientific Affairs has also concluded that while mold can cause reactions in people with allergies and asthma, there is no evidence that it causes other health problems or aggravates other existing health conditions.

Despite such conclusions, mold has the undivided attention of the public, lawyers and several huge industries, especially insurance and construction. How did this happen? The circumstances surrounding mold may be the latest example of irrationality born of uncertainty, rumor, misinformation and misunderstanding.

There is no doubt that the media has contributed substantially to the public's awareness of the potential hazards of mold. The media has also fueled the public's perception that, like most other problems, the solution to mold lies in a lawsuit.

The media's role in the proliferation of mold as a basis for litigation is twofold. First, the number of media and information outlets has expanded tremendously. As a result, there are simply more opportunities for people to hear about mold. While the media is not to be blamed for this abundance, it does deserve criticism for inaccurate reporting on the science of mold, the underlying litigation and insurance claims. For example, the Texas Department of Insurance stated that the total cost of mold claims during 2000 and 2001, including allocated loss adjustment expenses, was more than $1 billion, with an average claim of $22,740. In one of the foot notes accompanying the data, however, the department states, "Losses are total losses on claims where the presence of mold is known or alleged. The losses include costs directly related to mold (remediation, testing, etc.) as well as costs not related to mold, such as underlying non-mold-water damage, slab damage and other repairs not associated with mold per se."

Nonetheless, not long after this data was released, major newspapers in the United States reported, without mention of the possible impact of the footnotes, that mold claims in Texas had exceeded the billion dollar mark. Moreover, it was not mentioned until recently that Texans have a more generous homeowners' policy form than many other states when it comes to coverage for water damage claims.

The most famous mold case to date involves that of Melinda Ballard, who, in June 2001, was awarded in excess of $32 million by a Texas jury that concluded that her homeowners' insurer acted in an unfair, deceptive and fraudulent manner when evaluating a mold property damage claim. The lion's share of the damages awarded by the Ballard jury were for the fraud and bad faith components of the case. Yet, plenty of articles have been written about Ballard without sufficiently distinguishing between the bad faith and fraud aspects of the case and the component for property damage caused by mold.

In fact, the trial judge precluded the plaintiffs' medical experts from testifying on the basis of insufficient evidence linking the health problems at issue to mold exposure. So none of the award was for bodily injury, despite the clear impression to the contrary when Ballard was pictured on the front cover of the New York Times Magazine, standing inside her mold-infested home wearing a biohazard suit. …

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