INSURANCE JOURNAL-WEST September 20, 2004

By David Clayton

M

illions of dollars worth of building

defect litigation is going on today,

and water intrusion, which often causes

mold to grow, is one of the major issues.

Infrared (IR) thermography, the non-

destructive diagnostic technology that

allows one to detect moisture invisible to

the naked eye on or below the surface of an

object, can help insurance companies to

significantly reduce the cost and time

required to determine with certainty the

liability for water intrusion, and thus like-

ly areas of mold contamination.

The U.S. Chamber of Commerce

reported that in 2003 there were more

than 10,000 mold cases pending nation-

wide, a 300 percent increase

over 1991, and the Insurance

Information Institute estimates

that settlements for mold related

claims went from virtually non-

existent to $3 billion during the

same period.

Two or three years ago, a lot

of people thought mold was

going to be the replacement for

asbestos in terms of litigation

after several high profile settle-

ments: Ballard v. Farmers

Insurance Exchange in Texas and

California; Darren Mazza et al v.

Raymond Schultz et al, and let’s

not forget McMahon v. American

Equity Insurance Co. et al and

Ferrigno v. Mercury Insurance

Co., which involved the homes

of TV personalities Ed

McMahon and most recently,

Lou “The Hulk” Ferrigno.

In the Mazza case, the first,

and to date the only successful

mold personal injury suit decid-

ed by a jury—all others have

been settled prior to trial—the

plaintiffs received $2.7 million

plus fees and court costs for

injuries allegedly caused by

mold exposure.

While suing for water and

mold damage has not turned out

to be the litigation windfall that

asbestos was, it still can be a

problem and you still have to

clean the mess up. An IR camera

can help correct the problem by

confirming and defining it.

The sheer number of claims

that were generated forced the

insurance industry here in California and

across the country to add riders to their

homeowner policies, specifically excluding

coverage for personal injury resulting from

mold.

As a result, homeowners, apartment

tenants and many businesses, such as

hotels and motels, also not covered, have

started suing for negligence, leaving

builders and contractors, building man-

agers and rental and commercial building

owners and their insurance carriers highly

vulnerable to litigation.

But until now, proving or disproving

the cause and origin of the invasive mois-

ture, what caused the damage and where

it’s coming from, and determining whether

it’s covered and if it is, how much it’s going

to cost to repair it, has been time consum-

ing, expensive and often inconclusive. The

process of finding the source of the mois-

ture intrusion is the hard part, and has

usually combined visual inspection, field

experience in locating intrusive moisture,

the use of contact moisture meters and

tearing out walls and ceilings.

However, infrared, the technology

used by the military and law enforcement,

industry and science, can determine con-

clusively the cause and responsibility for

water intrusion, by quickly, accurately and

inexpensively identify its source, route and

scope. The IR camera reduces the process

required by older technologies, such as

moisture probes, from weeks to days. And

it’s hard to argue with assumptions and

speculations vs. scientific infor-

mation, no matter how expert

you are.

I myself am qualified in

California courts of law as an

expert witness in a number of

different fields and when you

pull out these thermal pictures,

boom, it’s all over with. Just as

you can’t argue with DNA evi-

dence anymore.

In the past, insurance

companies have relied on tech-

niques that have proven not to be

as reliable. IR is going to allow

the industry to be more exact in

the data that it obtains, and to be

able to resolve any claims that

may be occurring now, as well as

in the future, more quickly and

cost-effectively, saving time and

money. A large part of the sav-

ings is in the fact that more often

than not, when infrared is

involved, the case never gets to

court.

It is simply going to

be a matter of time before every-

body in the industry is using

infrared, because you cannot

debate the scientific results. The

insurance industry is in a posi-

tion to jump on board and run

with the technology.

If they don’t adapt to infrared

thermography, sooner or later it

will be recognized by plaintiff’s

counsel as the way to determine

whether or not there was water

damage, and if there was, whether

the insurance companies’ certified

vendors used the proper and latest

Thermography: Claims Adjudication’s Science of the Future

Infrared color thermal image clearly shows moisture intrusion, a potential source of mold growth,

in corner of ceiling. New FLIR ThermaCAM® B-Series of infrared cameras, specifically designed

for building inspection, can instantly and non-invasively detect moisture and structural prob-

lems. High-resolution B1 shown is a rugged, ultra-compact and affordable model that can

instantaneously inspect entire rooms—including places that are difficult to reach. All B-series

cameras store JPEG images which can be easily downloaded to a PC, and support software that

can generate reports literally with the click of a mouse.

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