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No-Burn Warranty helps builders deal with mold.

Mold exclusions on homeowners' insurance policies have gotten a lot of attention in the last few years, but less well known are mold exclusions on the risk and liability policies of homebuilders. Without traditional protection from mold-related homeowner lawsuits and remediation costs, many builders are turning to a novel form of mold warranty.

The seven-year No-Burn Mold Warranty covers the homebuilder for all areas treated with No-Burn MIH, a non-toxic compound designed to deny fuel for fire, as well as food for mold. The warranty, covering the homebuilder for up to $50,000 in mold remediation-related costs, is the only insurance-backed risk mitigation tool available.

This warranty gives the builder peace of mind that evaporated when his traditional mold insurance disappeared. Just as important, the warranty improves the builders' relationship with customers, reassuring homeowners that their new house is mold-resistant and they won't be on the hook for a clean-up if the worst happens. In that sense, the warranty separates the good builders from the best during the bidding process for new construction projects.

The same encapsulation process that protects No-Burn-treated building materials from fire has also been proven to resist mold growth. Unlike fire, mold thrives in the moist cavities of a structure. However, mold and fire need the same basic food source--the wood framing and paper-faced drywall installed in most homes.

Mold liability has sent the industry into such a panic some builders are actually setting money aside specifically for potential future mold claim payments. Builders should not have to create a costly "mold reserve" to guard against claims, and the No-Burn Warranty eliminates the need for these kinds of extreme measures.

In addition to single-family homebuilders, builders of multi-family apartments and condominiums with eight units or less can be covered by the warranty. Once we had established a market with single-family homes, expanding to multi-family made a lot of sense because mold's financial impact is even higher. After all, when you build a condo and mold breaks out, you have all the same problems times eight.

Builders are also turning to No-Burn's mold and fire protection system because it is the first warranty to offer formal certification, assuring protection against the costs of mold remediation.

In addition, homebuilders are attracted to the No-Burn system because it creates revenue without additional work or cost. To implement the No-Burn system, builders do not have to delay construction or fill out a change order. A No-Burn specialist takes care of the paperwork and the product application, even meeting with the homeowner personally to gain approval, if necessary. The cost of using No-Burn is added to the cost of the construction job and builders enjoy an additional revenue source.

However, this warranty answers an even larger question. We believe that a fundamental shift is needed in the way society understands mold remediation. We have made it our mission to show people that cleaning up mold efficiently should be secondary to preventing it in the first place. The science of it is simple--mold needs food to grow. So instead of throwing the majority of your energy and money toward remediation or expensive insurance riders, why not just take away the food source? No-Burn products can be that first line of defense against mold by denying it a home inside your housing project.
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Author:Rusk, Ken
Publication:Real Estate Weekly
Date:Nov 16, 2005
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