Mold from Construction Defects: Common Causes, Builder Insurance Exclusions, and the Experts You Need to Prove Your Case
Mold in a home or building is never just a nuisance—it’s a symptom of deeper, often hidden problems. Many homeowners first discover mold due to musty odors, visible stains, or worsening health conditions. What they don’t realize is that mold is frequently the result of construction defects—failures in design, workmanship, or building code compliance that allow moisture intrusion and create the perfect conditions for microbial growth.
At Hollington Law Firm, we represent homeowners throughout Colorado in construction defect cases involving mold contamination, and we understand the full legal, technical, and insurance landscape these claims present. Through this article we explain:
The most common construction defects that cause mold,
Why builder and contractor insurance policies often exclude mold,
How those exclusions affect collectibility—not liability, and
Which experts are essential to support your claim.
What Causes Mold from Construction Defects?
Mold requires just three ingredients: moisture, organic material (like drywall or wood), and limited airflow. Modern homes are built for energy efficiency, which means they’re tightly sealed—so once moisture is introduced due to a defect, it often gets trapped. Here are the most common construction defects we see that lead to mold:
1. Improper Window and Door Installation
Windows and doors must be properly flashed and sealed to prevent rainwater from entering wall cavities. If improperly installed, even minor gaps or missing tape can lead to chronic moisture problems that support mold growth inside the walls—often undetected until major damage occurs.
2. Roofing Failures
A poorly constructed roof may have missing underlayment, unsealed vents, exposed fasteners, or improperly installed flashing. These failures let moisture penetrate attic spaces, insulation, and ceilings, creating perfect mold conditions.
3. Defective HVAC Systems
HVAC units that are too small, oversized, or improperly ducted can cause humidity buildup. If negative air pressure or insufficient ventilation is present, moisture can condense on cold surfaces—leading to mold on walls, ceilings, and inside ducts.
4. Improper Grading or Drainage
If the ground slopes toward the foundation or lacks proper drainage systems, water can pool and seep into the basement or crawlspace. Once there, it saturates framing, insulation, and subflooring—leading to long-term mold contamination.
5. Missing or Defective Vapor Barriers
Vapor barriers are designed to stop moisture from entering wall and floor assemblies. If missing, improperly lapped, or punctured during construction, ground moisture can rise unchecked, feeding mold growth from within.
6. Plumbing Leaks and Condensate Issues
Hidden leaks from plumbing lines, HVAC condensate drains, or appliances can saturate adjacent materials over time. These areas are typically dark, enclosed, and unventilated—making them prime mold territory.
These defects are preventable with proper construction supervision, adherence to code, and the use of qualified tradespeople. When they aren’t prevented, builders may be liable for the resulting damage—including the cost of mold remediation and reconstruction.
Builder Insurance Exclusions and Their Impact on Collectability
Builders and contractors typically carry commercial general liability (CGL) policies, and may also have builder’s risk coverage during construction. But mold presents a unique challenge: most of these policies exclude mold-related damage outright. Here’s how:
Fungi or Bacteria Exclusions
These exclusions are often added by endorsement and bar coverage for:
Property damage caused by fungi (including mold and mildew),
Bodily injury resulting from mold exposure, and
The cost of mold remediation, testing, or removal.
These clauses are broadly worded and often applied to deny both defense and indemnity obligations by the insurer—even when the underlying construction defect (such as faulty flashing or a leaking roof) is otherwise covered.
Pollution Exclusions
Many insurers classify mold as a biological pollutant. Under traditional pollution exclusions, claims involving the discharge or presence of irritants or contaminants—including biological materials like mold—are not covered. While some jurisdictions have rejected this reasoning, Colorado courts have not definitively resolved this issue, and insurers frequently assert it.
"Your Work" Exclusion
CGL policies often exclude damage to the contractor’s own work. So if a stucco contractor improperly applies a vapor barrier and mold develops behind it, the insurer may deny coverage on the basis that the damage is to the contractor’s own defective work.
Why Insurance Exclusions Don’t Affect Liability—Only Collectability
It’s important to understand that insurance exclusions do not erase legal liability. Under Colorado law, builders, developers, contractors, and subcontractors can be held liable for:
Negligent construction,
Breach of contract,
Violation of express or implied warranties,
Violations of the Colorado Construction Defect Action Reform Act (CDARA).
If you can prove that a construction defect caused mold and related damage, you may be entitled to recover:
The cost to repair the defective work,
The cost to remediate mold and rebuild affected areas,
Relocation or loss-of-use expenses,
Medical expenses and lost income, where mold exposure caused illness.
But here’s the problem: if the builder’s insurance policy excludes mold, then any judgment you obtain might be uncollectible, unless the builder has other assets or coverage.
This creates a strategic challenge: the strength of your claim may not be the issue—it’s whether the builder can pay. That’s why we always evaluate:
What coverage the builder or contractor had,
Whether mold-related exclusions apply, and
Whether there are multiple defendants or additional policies that may provide a source of recovery (such as subcontractors, developers, or third-party manufacturers).
The Experts You Need in Mold-Related Construction Defect Cases
To succeed in a mold claim, you need to prove more than just the presence of mold. You must demonstrate that construction defects caused the mold, that it damaged your property or health, and that the repairs are necessary and reasonable. The following experts are critical:
1. Certified Industrial Hygienist (CIH)
A CIH performs mold sampling, identifies species, assesses health risks, and traces sources of contamination. Their reports help establish the presence and severity of mold—and that it’s a serious, verifiable problem.
2. Construction Defect Expert (Engineer or Building Envelope Consultant)
This expert ties the mold problem back to its root cause—faulty design, code violations, or substandard workmanship. Their testimony is vital to proving that the builder failed to meet industry standards or building code requirements.
3. Medical Expert
If you or a household member experienced health effects from mold exposure (such as asthma, sinus infections, fatigue, or neurological symptoms), a physician specializing in occupational or environmental medicine can link those symptoms to the exposure, supporting claims for out-of-pocket costs, lost income, and pain and suffering.
4. Cost-of-Repair Contractor or Estimator
This expert calculates the total repair costs—both to fix the defective work and to remediate and rebuild areas affected by mold. Their report also supports any relocation or alternate housing costs you may incur during remediation.
When You Need the Full Expert Team
Not every mold case justifies the cost of retaining four experts. However, a full expert team is recommended when:
Mold damage is widespread,
Medical symptoms or economic losses (e.g., missed work) are present,
Insurance coverage is contested,
The builder denies responsibility or blames other parties,
You anticipate litigation or trial.
In smaller claims, a qualified construction expert and contractor estimate may be sufficient. At Hollington Law Firm, we help clients make these determinations early—so they can focus resources on building a strong, strategic case.
Conclusion: Mold Damage Is Recoverable—If You Take the Right Approach
Mold contamination can have serious consequences—financially, physically, and emotionally. If the problem is the result of construction defects, you have the right to recover damages from the responsible parties. But as this article explains, builder insurance exclusions for mold can make recovery more difficult—especially when the builder is no longer in business or lacks assets.
That’s where we come in. At Hollington Law Firm, we combine technical understanding, legal experience, and strategic case development to help Colorado homeowners pursue meaningful recovery. If you’re dealing with mold from construction defects, contact us today for a free consultation. We’ll help you understand your rights, evaluate your claim, and determine the best path forward.
The information provided on this website is for general informational purposes only and should not be construed as legal advice or legal opinion. You should not act or refrain from acting on the basis of any information provided on this website without seeking legal advice from an attorney.