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Whether a refurbishment or new floor, wet floor problems are increasingly becoming a major cost to both builders and insurers. Floor failures are unfortunately increasing with growth only matched by insurers refusing claims for failed floors. Many problems are apparent but they almost always revolve around excess moisture.
Water damage is often believed to be a static effect of primary damage where the visual effects of contact and adsorption are a measure of damage. The reality is that water damage is dynamic, continuingly expanding it’s effects and is capable of developing far reaching secondary damage in minutes or days after the initial effects. Bio amplification, mould, corrosion, swelling and distortion are typical effects of uncontrolled water escape or flooding.
Lloyd’s of London and insurers generally will have to face escalating and extensive long tail potential claims from hurricane Katrina. As re-insurers or partners to many US prime policies they will be expected to pick up part of the restoration and recovery cost but will, we believe, be exposed to unnecessary costs far beyond the initial and expected reserve levels. The hazards and risks of mould in terms of health issues, bad faith and long tail claims should be high on the list of insurance risk mangers involved with Katrina.