Next Generation EIFS
EIFS before 2000 was a barrier system, meaning the EIFS itself was the weather barrier. After 2000, the EIFS industry introduced the air/moisture barrier located behind the foam. In a study conducted by the U.S. Department of Energy’s Office of Science, Oak Ridge National Laboratory, it was found that EIFS “outperformed all other walls in terms of moisture while maintaining superior thermal performance.”
The National Institute of Standards and Technology (NIST) has evaluated the five life-cycle stages of the environmental impact of EIFS alongside brick, aluminum, stucco, vinyl, and cedar. Depending on a variety of site and project-specific conditions, EIFS, when correctly designed and properly installed, has the potential to reduce construction costs and improve energy efficiencies and environmental responsibility. It will clearly continue to be important to understand this type of construction and the corresponding insurance implications.
How Does EIFS Lead to Insurance Losses?
EIFS was introduced in the residential construction industry in the 1980s, and property damage, due primarily to moisture, has been reported almost since the beginning. Moisture buildup can lead to two main problems – the deterioration of materials (i.e., wood rot) and the presence of mold and mildew. Homeowners in those states with humid climates have been most prone to EIFS-related damages. Generally, correcting the situation requires recladding the entire structure.
In addition to potential construction defect claims, homeowners may also follow with a personal injury complaint based on mold problems. As claims have mounted, insurers have been adding more exclusions on Commercial General Liability (CGL) policies, and some have stopped writing this coverage altogether. Typical allegations in an EIFS case include negligence and/or negligent supervision, breach of express warranties, breach of implied warranties, unfair or deceptive trade practices, and strict liability. Courts will continue to grapple with methods of determining and allocating risk in this burgeoning area of construction law.