Mold Damage From Allegedly Defective Work Excluded From CGL Coverage

Following a contractor’s remodeling of a house, the home owner sued the contractor and its commercial general liability (CGL) insurer, Wisconsin Mutual Insurance, as well as its own homeowners insurer, Hastings Mutual Insurance. The home owner claimed the house was rendered uninhabitable by the contractor’s negligent work on a bathroom that resulted in leaking water, which caused mold to grow and then release the chemical trichothecene into the residence. Both insurers claimed that the alleged damages were excluded from coverage under their policies based on their mold exclusions. Declaratory judgments by the trial court for both insurers were affirmed on appeal—holding that the "damages" claimed in the plaintiff’s complaint arose out of a "pollutant" or "mold" and not from covered damages, such as water damage.