by Valerie Stakes, editorial coordinator/associate editor
Do your service crews find and fix mold problems in commercial buildings? If so, are you aware of the growing liability you face as a contractor? During the past year, a number of mold-related lawsuits have trapped some HVAC contractors and could trap you as well.
As the majority of these high-profile lawsuits has involved homeowners, most of the attention has fallen upon residential contractors. Nevertheless, commercial contractors face the same liability, often with more severe consequences, as building owners with deep pockets and crack legal teams can take a successful business and destroy it.
Many contractors are already feeling the effects of the ever-increasing number of mold lawsuits, even if they haven't been involved in any legal battles of their own. According to Joel Appelbaum, assistant vice president at CNA Insurance Company, contractors can expect to see increased insurance premiums and diminished coverage.
"The massive amount of tort litigation during the past year has led many carriers to exclude mold coverage on their insurance policies," says Appelbaum. He adds that the limits being placed on payouts to homeowners and business owners have put contractors in the precarious position of being held financially responsible for mold problems.
"Unfortunately, contractors really do have to worry about being held liable in mold claims. In certain situations, even a successful company could be put out of business."
To avoid this, Appelbaum advises contractors to be wise about the work they accept. "If you're called to service equipment where a mold problem is suspected, don't touch anything without the mold first being remediated. This applies particularly when you didn't install the equipment," he says. "In addition, get a release clause from the owner stating that this is a pre-existing condition, and that you will not be held legally responsible."
He also advises attending as many mold-related seminars as possible and working with professional associations. "Your insurance company can provide you with valuable information. For example, at CNA, we offer our contractor customers training on best practices, quality control, and mold prevention."
Finally, Appelbaum predicts that contractors could see even more stringent underwriting and increased insurance rates if, and when, there's a more sizable body of scientific evidence on the hazards of mold.
"At this point, there isn’t enough credible science or peer-reviewed medical literature linking mold to health problems. There are also few standards for remediation," he says. "Until there's more evidence, the best coverage is prevention."
Same Old Mold, Different Tune
For most contractors, mold isn't anything new, particularly for those in humid climates.
"In our region, humidity has always been an issue," says Bob FitzGerald, chairman/CEO of FitzGerald Contractors, Inc., Shreveport, LA and president of the Mechanical Contractors Association of America (MCAA). "In fact, during my 30 years in this industry, I can't think of a time when you couldn’t find mold in just about every building in our market place."
What has changed, says FitzGerald, is the increased potential for litigation.
“We train our employees extensively to make sure they recognize how serious mold can be, both from a health and legal standpoint,” he says. "While we don't expect them to identify the different types, our service techs are trained to prevent it through good practices, such as using algaecides in drain pans. They also know to inform us immediately if they see a potential problem such as a buildup of mold next to the air conditioning system.”
The importance of an education in indoor air quality (IAQ) extends to customers as well. “We work with our customers to show how proper, routine maintenance increases the life of their equipment leads to improved indoor air quality, and reduces complaints from their tenants,” says FitzGerald.
Bringing in experts for additional support is also key, he says. “We’re experts in air conditioning, not mold remediation. If a situation is beyond our capabilities, we work with a professional service to handle extensive mold mitigation.”
Despite the increased concern for liability, FitzGerald refuses to lose sight of what’s most important: the customer. “Customer satisfaction has always been our number one priority,” he says. “If there’s a build-up of mold, we have to find the source of moisture. If our equipment is at fault, we have to determine why and repair or replace it. However, this has more to do with providing great customer service than staying out of legal troubles.”
When it comes to sidestepping mold liability mine fields, many contractors find that the best offense is defense. For example, Hill York Service Corp. in Fort Lauderdale, FL takes a proactive approach to keeping customers satisfied and away from lawyers.
“We take all customer concerns regarding indoor air quality very seriously,” says Mark Kerney, president. “If a customer reports a potential problem, we respond immediately to determine the cause. If it looks in any way that our equipment could be at fault, we repair or replace it. If it’s running normally, we bring in an industrial hygienist to determine what else could be causing a problem. Either way, we see that it’s resolved.”
Like FitzGerald, Kerney sees partnering with an industrial hygienist as another means of staying out of harm’s way.
“In Florida, the potential for mold liability is extremely high. In fact, I recently saw a flyer for a conference on mold litigation designed to instruct lawyers on how to sue for suspected mold damage,” he says. “For that reason, we have no interest in taking on mold remediation work. It’s just not worth the risk, particularly when there are professionals who have the necessary expertise.”
At the same time, Hill York is working to avert mold claims before they even arise. “For our maintenance contracts and proposals, we want to include a clause that limits our liability in mold claims,” says Kerney. “We’re working with our lawyer to ascertain we use the right verbiage. Hopefully, this will help head off any potential problems before they start.”
Finally, Kerney ensures that employees are thoroughly trained to handle indoor air quality issues. “We’ve brought in a consultant from the company that handles our mold remediation to provide IAQ training for our employees,” he says. “If a service tech is required to clean coils with mold on them, we want to make sure that he knows the proper cleaning procedure and what protective equipment to use.”
Offering employees protective equipment such as face masks serves two purposes: Not only does it safeguard employees from exposure to mold, it also protects the employer.
“We recently attended a seminar on mold sponsored by our local MCA chapter. What we learned was how employees may be just as litigious as customers when it comes to claims of mold exposure,” Kerney adds. “Providing the necessary training and equipment protects our valuable employees and ensures that we stay in business to continue providing our customers with great service.”
Despite the increasing concern over contractor liability, the good news is that there are steps contractors can take to protect themselves and provide their commercial customers with great indoor air quality.
According to David Munn, a principal with the Chelsea Group, good design and proper equipment selection can go far in preventing mold growth. For example, properly sloped drain pans and correctly sized cooling coils and drain traps are a good place to start.
"If the drain trap isn't sized properly, you could inadvertently pull air up from the equipment room through the condensate drain pan. This prevents the condensate from draining properly," he says. "When air is pulled through that drain trap, it starts splashing water into the fan section suction, causing moisture to go where it shouldn't and contributing to mold growth."
Munn also advises to look at coil face velocities. "If your face velocity is less than 550 fpm, the condensate that commonly forms on cooling coils can drip straight down the coil into the condensate pan," he adds. "However, if it exceeds 550 fpm, the air going through the coil can push the condensate off the coil and into the airstream."
Improved filtration can also help retard mold growth. "Look at the MERV (minimum efficiency rating value) rating of the filters you use, which range from 1 to 16," Munn says. "The higher the MERV rating, the better, because those filters can capture a large percentage of airborne mold spores. There's even an addendum to ASHRAE 62-2001 60.2 advising requiring a minimum MERV of 6 ."
Finally, Munn advises looking into mold training programs sponsored by organizations such as the American Indoor Air Quality Association (IAQA) Council and the Association of Energy Engineers (AEE). "These organizations offer workshops on indoor air quality and provide strategies on how to deal with mold," Munn says. There are also numerous certification programs for contractors interested in exploring mold remediation.
"Even if a contractor opts to stick to just HVAC," Munn says, “he needs to understand the implications of mold and what to do and whom to call if he encounters it."
No End in Sight
As mold-related legal actions gain momentum, it’s likely that mold claims will increasingly affect HVAC contractors across the country. According to FitzGerald, “During my extensive travel this past year, I didn't have a conversation with a contractor in the U.S. or Canada where the mold issue didn’t come up. It’s just not going away.”
For this reason, he stresses that contractors must work together — in service and new construction — to develop a logical approach, “that solves the problem at its source, and doesn’t just put a bandage on it.” He adds, “We have to come up with the right, not knee-jerk, solution that protects us from lawsuits and protects our customers.” n
Valerie Stakes, editorial coordinator/associate editor, can be reached at 216/931-9439 or by e-mail at [email protected].