Insurer pulls back on coverage for toxic mould

Building mechanical engineers and architects may be finding it difficult to breathe due to anxiety now that they’re left exposed to claims in a growing area of litigation. The insurance company ENCON Group has decided to restrict the professional liability coverage it can offer to mechanical engineers for toxic mould in buildings. The company is excluding coverage for this problem entirely in policies for architects.

In its December 2002 newsletter “Ensight,” Derek Holloway, who is senior vice-president of the company’s construction division explained:

“The “mould crisis” that has plagued many U.S. states is slowly rearing its ugly head in Canada and we have had a number of claims and potential claims reported. While there is still much debate over which types of mould are problematic and who is responsible for any alleged damages, we are very concerned that such claims may become more frequent in the near future as certain lawyers perceive this as a business opportunity. The A&E program [Architects and Engineers Professional Liability Insurance Program] cannot sustain another hit such as the one following the ‘leaky condo crisis’ in B.C.

“Consequently, we will be excluding coverage for mould claims under policies issued to architects and will be restricting coverage for firms providing mechanical engineering services. The Ontario Association of Architects, which runs an insurance program for all architects in the province, has already imposed an exclusion under its members’ policies.”