Insurance broker warns toxic mould could become the 'new asbestos'

By Saeed Shah
16 August 2002

Is mould the new asbestos? A leading insurance broker has warned that toxic mould has led to a growing number of claims in the United States and the problem is beginning to become apparent in the UK.

In the US, "toxic mould syndrome" has led to a court award of $32m (£21m) to a Texas resident, Melinda Ballard, after her insurer failed to recognise the problem or realise its policy covered mould. The real life Erin Brockovich was driven out of her new California home by the discovery of mould. Naturally, the crusader on whom a major Hollywood movie was based, is suing the builder. The insurance industry in the US is braced for billions of dollars of claims.

The problem is caused by dampness, which allows certain toxic varieties of mould to grow in buildings. Combined with modern building materials, this mould can lead to serious respiratory problems and, according to one claim, even deafness. Buildings where the mould has gone out of control have had to be demolished altogether.

Jardine Lloyd Thompson said insurers, landlords, developers and makers of building materials in the UK need to be aware of the dangers in order to work to prevent conditions where the mould flourishes.

Peter Franklin, the technical director at JLT Corporate Risks, said: "Asbestos started off very slowly and no one took it seriously. Then the problems started to become apparent. The fear is that mould could be very similar."

At least 12 types of fungi are recognised as being harmful, with names such as Stachybotrys chartarum and Fusarium. Mould feeds on organic materials such as carpets, wood and wallpaper and eats into plaster and brickwork, which then have to be replaced. A US investigation firm has reported seven new mould-related instructions a day.

Yuppie-style warehouse conversions are particularly susceptible, because they are old buildings which have never before been heated. Once converted, with central heating and partitions put in, ideal breeding conditions for mould are created.

The sudden heating draws moisture out of the building's structure. "Older buildings that have been converted and unevenly insulated are a particular problem.... Rooting this out is a very expensive exercise," Mr. Franklin said.

The health problems caused by asbestos have led to tens of billions of pounds worth of claims and the scale of the liabilities almost brought down Lloyd's of London a decade ago.

Mr Franklin pointed out that the increased frequency and severity of flooding in the UK could lead to greater instances of mould infestation. He said the Government promised two years ago to spend money on flood defences, in return for the insurance industry continuing to cover flooding. Nothing, however, has been done, he said.

Mr Franklin said most people exposed to toxic mould would not be aware of it initially. But it can lead to illnesses with long-term health effects, especially with breathing. Workers in some commercial buildings have long complained of flu-like symptoms.

In offices, the mould is often carried from dampness in the basement by air conditioning systems. "Sick building syndrome" may include toxic mould as one of its causes.