You have invested hundreds of thousands of dollars into your commercial property but the building has no street appeal is EIFS the answer, or a nightmare waiting to happen.

Exterior Insulation and Finish Systems (EIFS) is a non-load bearing wall cladding system made up of insulation board attached to a substrate, air and water resistive barrier, drainage capability (key component) and a reinforced base coat and protective finish. EIFS insulating properties, and attractive price have made it very popular for commercial property owners for the past half century but beneath the benefits lies a potential costly and possibly uninsured risk: Mold.

When improperly installed without a drainage system, EIFS can trap moisture inside building walls, leading to hidden damage and potential liability. To make matters worse, mold and EIFS-related claims are often excluded from standard liability policies, leaving property owners exposed to not being covered for a loss.

As described above EIFS is a multilayered exterior wall system, this layered design element is how water can enter the system and mold can grow. Keys to avoiding mold are; Proper Installation and ongoing preventative maintenance.

Brian Shaffer an underwriter at our partner Central Insurance explains that  prolonged water exposure can weaken wood framing, compromising load-bearing capacity and threatening the safety of occupants. At the same time mold and fungi growth can create health risks, from allergies to respiratory issues.

The structural and health-related threats make EIFS-related mold issues uniquely challenging. Repairs can be costly, invasive, and time-consuming, and liability claims may extend beyond property damage to bodily injury.

Despite the risks, property owners are still unaware that many standard liability policies commonly exclude EIFS. This exclusion is due in part to the insurance industry's long-standing discomfort with the exposure, given how quickly mold claims can escalate.

What can I do if my strip center or shopping center has EIFS to reduce mold risk?

Ensure flashing and seals and all drainage components were installed correctly so moisture can not seep behind the insulation. Consider installing newer EIFS with drainage. But proper installation is still key to avoiding mold.

Maintenance; Small cracks and sealant failures must be addressed regularly to stop water incursions.

For now, policy exclusions related to EIFS are here to stay. So, if you are having EIFS installed on your strip mall make sure your contractor’s insurance policy does not contain an EIFS exclusion and ensure the contractor is using a new drainable EIFS system and has been properly trained by the Association of the Wall and Ceiling Industry through their EIFS-Doing It Right program.

If you have more questions regarding your strip mall’s insurance program or would like a no obligation quote, contact the Trusted Choice Agents at Richey-Barrett Insurance.