Is Mold Control Worth the Gamble?
By Heather Gooch
May 1, 2003
For some PMPs, toxic mold inspection and remediation services hold the promise of a successful add-on business that enhances their designation of "protectors of public health." For others, it's perceived as a surefire route to a high-profile lawsuit. They contend that there is a lot more unknown than known about toxic mold, and in this litigious society it's not worth the risk.
Regardless of which group you find yourself in, experts are predicting that toxic mold is going to remain a hot topic in the pest management industry for a while - particularly for states that have report requirements for wood-destroying organisms (as opposed to wood-destroying insects).
"The reality is that in WDO states, when you're doing a termite inspection you're required to report any wood-destroying organism or condition conducive to the growth of a WDO," explains Bob Rosenberg, director of government affairs for the National Pest Management Association, Dunn Loring, VA. "That begs the question, is toxic mold a WDO, and do you have an affirmative obligation in those WDO states as opposed to WDI states to report toxic mold? If you fail to, does that create a liability for PMPs?"
Gene Harrington, NPMA government affairs manager, points out that the association currently has a task force to fine-tune its position on the issue (see "Mold issue starts growing," page 52). He adds that many industry groups are trying to limit the scope of WDO down to just WDI for real estate transactions.
"There are many places where WDO is the norm, the longstanding tradition and the law. In some states, because of weather conditions, etc., it just seemed more appropriate. However, I don't think it was ever anticipated that it might wreak havoc like it is now, causing people to reconsider whether they should take on liability of WDO because it brings on so many more things," says Harrington.
First things first If you decide to offer toxic mold services, Michael Weisburger cautions that the first thing to do is call your insurance carrier to see whether it will even cover such a venture.
"A lot of insurance companies have gone from insuring reports for WDO claims to just WDIs, to just termites and carpenter ants, and back to WDOs," notes Weisburger, president of B. & D.A. Weisburger Insurance, White Plains, NY. "Now, all the insurance companies are looking seriously, if they haven't already done so, to going back to WDIs.
"The three scenarios are no coverage, full coverage or limited coverage," he continues. "To illustrate limited coverage, say a PMP buys $1 million of general liability protection. There would be what's called a sublimit within the policy concerning mold-related claims. That sublimit might be $50,000. So all of a sudden, the PMP who thinks he has $1 million only has $50,000, per claim. Then there's the aggregate limit, which means the total of all claims related to that matter would also be $50,000. And there would be different variations of that. You might see $10,000 per claim, and $50,000 aggregate, for mold-related claims. That means an insurance company won't pay more than $10,000 for any one claim in a given time period, and there won't be more than a total of $50,000 for all mold-related claims. So you could have five $10,000 claims or ten $5,000 claims, for example. If you had one $30,000 claim, they'd pay $10,000."
In addition to conferring with your insurance carrier, industry attorney Greg Crosslin notes that you should also check in with your state regulatory agency.
"Your state regulator could be your best friend here," quips the Montgomery, AL-based partner of Crosslin and Associates. "Check with them to make sure you are doing exactly what they would deem appropriate. Make sure you've adhered to every regulation, rule or statute you can find. Going to the regulator first may save you a whole lot of heartache."
After checking out the insurance and regulations, Crosslin recommends immersing yourself in a training program, preferably a week-long course in industrial hygiene or indoor air quality that requires certification.
"There are a few really good organizations that train people on how to remediate mold. It's expensive, because it's labor intensive and very demanding. And it should be; we're talking about protecting people's lives," he says.
High-profile hype Crosslin notes that mold is such a hot topic because of several high-profile lawsuits in a short period of time, including settlements with household names like Erin Brockovich and Ed McMahon.
"Part of the problem is, mold has been around forever," he continues. "Yet, we still don't know a lot about it in terms of our public awareness. It's something that scares us. We talk about biological warfare and we're talking about molds, allergens, antigens, carcinogens - all those things the public knows so little about. I like to call them 'litigens' - something we don't know much about, let's just sue over it! That has forced a lot of hands.
"We get big runaway verdicts, which lead to insurance companies telling a state like Texas or Florida: 'We're not going to write in your state anymore.' This causes the state departments of insurance to start panicking, because how do they protect their consumers? So they give the insurance companies some protection, which changes the insurance companies' decision, which changes policies, which changes outcomes."
Crosslin believes that because homeowner insurance companies were so swift to react, plaintiffs' lawyers began looking for somebody else to sue - and pest management firms are likely candidates.
"After all, we're the guys going under the house," he adds. "So when you start looking around on an inspection in a home, we're always the guys left standing. And by regulation in most states, we're required to have insurance, which makes plaintiffs' lawyers really happy because they know there are pockets to go after."
Tiny but troublesome One square inch - approximately the size of your thumbnail - can hold 10,000 spores, and it only takes three to five spores to affect a human. That's startling odds for your technicians, who may only be thinking about the pest matter at hand and not the potential mold dangers.
"What if 'Bob' goes under an 80-year-old house and starts scraping with a screwdriver, wondering what this gunk is?" Crosslin proposes. "First, he's got himself to worry about. If he doesn't have the proper respirator or Tyvec suit on, is he exposed? That's a potential workers compensation claim. Then if he does scratch it up and get it exposed, spores can hang in the air for weeks. If they get sucked into the house through the air conditioning system, and don't get caught by the filter, mold is now in the house. Suppose there's a baby or elderly person in the house - there are just so many unknown variables it's a real concern."
On the other hand, if you're willing to invest the time in training and doing a thorough job, mold inspection and remediation can reap plenty of rewards. Just ask Jeffrey Brown, CEO of American Scientific Environmental Management, Van Nuys, CA. Brown recently became a mold remediator, after more than a year of doing mold sampling and inspection services.
"As far as I'm concerned, though, I've been doing 'mold control' for 30 years. It's always been part of our termite service, because if you deal with water intrusion on the termite end, it's exactly what you're dealing with on mold. We used to call it fungus and dry rot," he adds.
Brown points out that his general pest and termite technicians are instructed to stop what they're doing if they encounter something that even resembles mold.
"I tell them to pull off until we can talk to the owner, identify it and see whether we can talk the owner into taking some samples and tests," he says. "Going for a fungus treatment is completely different than it used to be - the old scrape-and-treat for $105 is no more. I've actually lost jobs over it, because I'm not willing to put my guys at risk because of what I know. As termite companies, we also have to educate our technicians on what to look for and on wearing the proper equipment. I wouldn't let any of my guys go under a house without eye care, respirator and gloves."
If you don't want to offer the services, Crosslin recommends putting it in writing.
"Something like this needs to be specific and customized to your company," he says, adding that at press time, the South Carolina regulatory agency planned to issue an approved standard disclaimer for state PMPs to use. "Have the customer sign off on the contract, especially if he or she has a known allergy, sensitivity or immunity deficiency - not just HIV, but hepatitis C, lupus - many common health issues that people don't think about disclosing when they start treatment in their home."
And if you're out, stay all the way out, Crosslin stresses: "I had a PMP tell me that he tells homeowners, 'I can't use it, but get yourself a chlorine bleach solution to take care of the mold.' I asked him, 'Where on the bleach label does it say anyone can use it for mold?' It's an old treatment technique, for sure, but it's not labeled for that. So we have to be very careful not only what we do, but what we recommend to our customers."
A serious business decision Put in perspective, the risks involved with toxic mold work aren't too far off from mixing pesticides or driving your route. Brown feels comfortable in offering his service because he knows he has the proper training and equipment to back up his work. He carefully words his paperwork to minimize liability. ("We use 'appears to be' a lot in the reports," he quips.) For now, he's the only one in his mid-sized company who physically does the inspection, although in the future he sees the business overtaking his termite services.
"Right now, it's only about 20% of my business, but I expect it to be about 90% five years from now," he states. "However, it's not for everyone. It's a good fit for our company because of my background in entomology, biology and clinical anthropology. However, it takes somebody who's very technical and doesn't mind reading a lot - you know how much there is to read in the termite industry, that's about 1/10th of what I have to read about mold."
Still, Brown adds that the business potential is great, and could actually overtake his termite business: "When I offered the mold inspections to my existing customers, I had about 50% call me to learn more about it. I'd say about 30% have agreed to do it."
Crosslin agrees that if you're willing to take on the risk, it can be both a lucrative opportunity and a way to set your company apart from the competition.
"With every opportunity, there's a potential liability," he concludes. "As long as PMPs counterbalance that and think it out, that's OK. It's something that can fit into our industry, but we need to make sure it fits on our terms, not in the terms of a lawsuit."