HVAC and Mechanical Contractors are faced with a unique challenge in today's insurance market. While they are traditional contracting risks, they have become the focus of growing pollution and mold related claims over the last several years. Exacerbating the problem is the trend of holding these contractors to a higher standard than many other trades, in effect giving them a "professional" liability exposure. These firms are now being expected to not only install the equipment properly, but to consult on its design and identify potential problems with another's design as well. While flattering, it creates a coverage issue for many of these risks. HVAC and Mechanical Contractors have two primary areas of concern: contracting services creating environmental problems and growing professional exposures.
Contracting services can create environmental problems in the following ways:
Installation leads to hazardous indoor air quality.
One of the biggest environmental concerns faced by Mechanical / HVAC professionals is the allegation that their work has led to an unhealthy indoor environment. This can manifest itself in many ways, including odors, ill employees, or staining and damage to walls and fixtures. When these allegations lead to Bodily Injury, Property Damage, or Business Interruption, the claims can become sizeable. If the basis of the claims is the toxic nature of the contaminant, pollution exclusions are often cited.
Installation leads directly to mold growth.
Mold growth is generally caused where moisture, a food source, and an acceptably warm environment meet. One of the unfortunate drawbacks to installation problems with HVAC systems can often be excessive moisture, either in the form of condensation or actual leaks. This moisture, matched with wood or wall board and warmth, leads to mold. Most mold claims are excluded from CGL policies.
Job site pollution caused by the contractor disturbing existing conditions.
Many claims faced by …