An XL insured laboratory contracted with a general contractor (GC) to provide analysis of mold spores taken from a hospital mold remediation and reconstruction project. Following a failed remediation project, the hospital sued the GC alleging various errors in the GC’s project services. The GC filed a third-party action against our insured for $4,500,000, alleging that failures on the project resulted from the insured’s acts, errors or omissions in its laboratory analysis of the mold spores.
XL’s environmental claims counsel retained local defense counsel to defend the insured in the litigation. XL’s environmental claims counsel and defense counsel worked closely with the insured to investigate the allegations. A determination was made that the insured had used an incorrect procedure for the analysis of the mold spores. However, defense counsel was able to successfully argue that the insured’s alleged negligence did not result in any substantial damages to the GC or hospital.
At a subsequent mediation, the claim was settled against our insured for a fraction of the claimed damages. XL paid $350,000 under the insured’s Professional and Contractor’s Pollution Legal Liability Policy to resolve the claim on the insured’s behalf.