When a car accident or a fire causes personal injury or property damage, it is easy to determine whether or not there is insurance coverage and specifically, which policy applies to the loss. But when exposure to a toxic substance produces disease symptoms over a period of time, the insurance issues can complicated. New York follows the “injury-in-fact” rule: insurance coverage is triggered when the injury, sickness or disability actually began, not at the time of exposure or diagnosis.
Landlords and insurance companies must analyze the relevant circumstances to determine whether a particular policy applies to such claims. In the typical lead poisoning scenario, for example, they must look at the dates of tenancy, alleged exposures, development of symptoms and visits to doctors, renovations and painting, and clearance by health officials. With regard to mold, the parties must look at the cause in order to evaluate the insurance issues. The standard Comprehensive General Liability policy excludes mold damage as “normal wear and tear” and only covers contamination if it is the result of water damage from a burst pipe or a leak. Therefore, an immediate and thorough response will allow the adjuster to determine if the mold condition pre-existed the water damage and, therefore, whether a basis to disclaim exists; the longer the carrier waits, the harder it will be to state that the mold was not caused by a covered loss and the harder it may be to defend the underlying personal injury lawsuit.