Left in the dark – hurricane service interruption claims
When a hurricane or tropical storm hits, it’s easy to determine whether your assets suffered physical loss or damage almost immediately, with tree limbs puncturing a roof, broken glass or water showing up inside a building. But what if your facility didn’t suffer physical damage but you still could not operate due to lost power? Or a large quantity of temperature-sensitive property spoiled due to a loss of power of a refrigeration system? If a loss of utility services was the result of a peril that occurred at the premises of the utility provider, and is otherwise covered by your property insurance policy, you may have coverage for your resulting property damage or business interruption loss.
This coverage, called Off Premises Utility Services or Service Interruption, is intended to cover such property damage and business interruption loss at insured locations that result from the interruption of certain incoming utility services such as electricity, fuel, steam, water and refrigeration or the lack of outgoing sewerage service. But note that the interruption must be due to a covered peril at the facility of the provider of such services.
This is especially important right now given the recent storm that moved through the Northeast. In addition to severe flooding and wind damage, Hurricane Irene managed to leave many homeowners and businesses without power for several days. Depending upon the scope of coverage afforded by your property insurance policy, you may be able to recover if you suffered a loss that is attributable to a lack of utility services at your facility.
William Gallagher Associates is a leading provider of insurance brokerage, risk management and employee benefits services to firms with complex risks and dynamic needs, within industries that include technology, life sciences, financial risks, health care, renewable energy & clean technology, and environmental services. WGA has offices in Boston, MA; New York, NY; Hartford, CT; Princeton, NJ; Columbia, MD; and Atlanta, GA.