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Is Mold Damage Covered Under Your Commercial Property Policy?

Mold is a common problem faced by commercial property owners in the United States, with over 85% of commercial properties affected by mold growth. Mold not only damages the property but also poses a serious health risk to the occupants. Exposure to mold can cause respiratory issues, headaches, and other health problems. Hence, it’s crucial to prevent your commercial building from mold damage. In this blog, we will discuss whether mold is covered under your commercial property policy and what you can do to protect your property and occupants from the harmful effects of mold.

What Is Mold and Why Is It a Problem?

Mold is a type of fungus that grows in damp and humid environments. Mold spores can travel through the air and settle on surfaces where they can grow and spread rapidly. Mold not only damages the structure of the property, but it can also cause health problems, such as allergies, asthma, and respiratory infections. Mold can also cause unpleasant odors and discoloration of walls, ceilings, and furniture, which can lower the value of your commercial property.

Read: Why Do You Need Commercial Property Insurance for Your Business?

How Can It Be Prevented?

Preventing mold growth in commercial properties is crucial to maintain a healthy and safe environment for occupants.

Here are some ways to prevent mold growth:

  • Keep humidity levels below 60%.
  • Fix leaks and water damage immediately.
  • Ensure proper ventilation in all areas of the property.
  • Use mold-resistant materials when building or renovating.
  • Clean and dry any damp or wet areas within 24 to 48 hours.
  • Regular inspections and maintenance of your commercial property can also help detect any mold growth early on and prevent it from spreading.

Commercial Property Insurance and Mold

Commercial property insurance typically covers damage caused by certain perils, such as fire, theft, and natural disasters. However, when it comes to mold, coverage may vary depending on the insurance policy and the circumstances surrounding mold growth.

Limited Fungus Coverage

Many commercial property insurance policies offer limited coverage for fungus, including mold. Limited fungus coverage usually covers only specific types of mold and is subject to a sub-limit, which means that the insurance company will only pay up to a certain amount for damages caused by mold. The sub-limit for fungus coverage can vary from policy to policy, and it is usually lower than the total coverage limit.

How Limited Fungus Coverage Works

Limited fungus coverage typically covers damages caused by mold resulting from a covered peril. For example, if your property suffers water damage due to a burst pipe, and as a result, mold growth occurs, limited fungus coverage may cover the damages caused by the mold up to the sub-limit. However, if mold growth occurs due to poor maintenance or neglect, the insurance company may deny coverage or reduce the amount of coverage provided.

It is essential to review your commercial property insurance policy to understand what is covered under the limited fungus coverage and the sub-limit that applies. You may also want to consider adding additional coverage for mold to ensure that you are adequately protected.

Read: Why Do You Need Commercial Property Insurance for Your Business?


Mold growth can cause significant damage to your commercial property and pose a serious health risk to your occupants. While commercial property insurance may provide some coverage for mold damage, it is usually limited and subject to a sub-limit. To protect your property and occupants from the harmful effects of mold, it is essential to take preventative measures and ensure that you have adequate insurance coverage.

Cover Your Commercial Property Against Mold Damage with McCarty Insurance

At McCarty Insurance Agency, we understand the unique risks faced by commercial property owners in the United States. We offer comprehensive insurance solutions tailored to meet your specific needs, including coverage for mold damage. Contact us today to learn more about our commercial property insurance options and how we can help you protect your property and business.


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