While mold often appears in buildings as a musty smell, it might as well show up wearing a lawsuit. According to the Insurance Information Institute, in 2002 U.S. insurers paid $3 billion in mold-related claims -- more than double the $1.3 billion figure in 2001. Forty state insurance departments have approved mold exclusions and/or limitations on homeowners' insurance policies. Before 2000, the few mold-related claims that occurred generally ranged between $3,000 and $4,000. Today, claims average between $15,000 and $30,000 and can exceed $100,000 each. Commercial claims can reach into the millions.

If your customer finds stained drywall or disintegrating siding and sheathing because of a plumbing leak or poorly detailed window flashing, guess whose phone will ring first? Complicating this is that some lawyers tack mold-related problems onto other construction defects claims, even when there is no evidence of mold, says attorney Russ Nassof, a principal at Environomics, a national environmental investigation company based in Bethesda, Md. This would be less worrisome if insurance underwriters were standing behind their contractor-customers in the face of moisture and mold-related claims, but they're not, so you're likely to be fighting these battles alone. According to Nassof, insurers are looking for ways to protect their own businesses and cover contractors simultaneously. One way they're trying to cover customers is by certifying training programs.

To protect yourself, you must act now. Step 1: Build a strong first line of defense against moisture intrusion into the building envelope. Learn as much as possible about the latest details and proper installation techniques for exterior systems, including sheathing, siding, windows, housewrap, and flashing. Step 2: Learn to build a second line of defense called a "drainage plane," and realize that drainage planes need to be different depending on each construction system and climate. Step 3: Determine what type of vapor barrier is best for your climate and where it needs to be installed.

Prevention Is the Best Medicine

The idea of prevention is easy to get your head around -- keep the water out -- but implementing sound practices may require re-evaluation of how you detail. And, there's one more thing to remember: No matter how hard you try to keep water out, it will probably get in anyway.

This is where a new specialty -- building science -- is playing a larger role on the jobsite than ever. Building scientists have concluded something many builders thought otherwise: Buildings -- no matter how conscientiously sided, papered, flashed, and caulked -- leak water. They always have, and they always will. But it's a more dangerous dilemma than it used to be because we demand more from a home than ever.

Older buildings that leaked have proven no real problem, historically, because those buildings also leaked air. For example, they had less insulation than today's homes or were sheathed with 1-by (skip-sheathing), which allowed air to circulate through stud cavities, drying them out. Since mold requires three things to exist -- a food source, warm temperatures, and moisture -- removing moisture from the picture effectively starves it to death. Houses, obviously, are tighter now and more thermally efficient than ever, which means far less air passes through the wall cavity. And, we're packing them with modern building materials that also provide a greater abundance of food for mold spores, such as organic paper-faced drywall instead of cementitious plaster. These materials, combined with heat flow reduction in tighter houses, changes the drying rates of buildings, according to Mark LaLiberte, a building scientist with Building Knowledge in Minneapolis. So, we're packing our buildings with more free food for the mold, then locking the doors until the smorgasbord is over.