October snowstorm leaves many without insurance coverage
The unprecedented October 2011 snow storm that hit Connecticut, Massachusetts and other eastern states caused significant destruction to trees as well as sensitive outdoor infrastructure such as radio towers and power lines. As a result, many commercial businesses were left in the dark without any insurance recoverable. Many area businesses sustained a loss of revenue due to extended power outages without having sustained physical loss or damage at their insured premises, therefore the loss will likely not be covered by Commercial Insurance. Business Interruption coverage is normally triggered by direct physical damage to covered property, such as a tree falling on a business’ building and puncturing the roof.
There is, however, some coverage available in the marketplace for losses resulting from a power outage, but is it is not commonly purchased. This coverage is typically referred to as “off-premises power” or “utility interruption” coverage. It is either not provided in a standard Property policy, or if it is, the standard limits available do not offer meaningful coverage to an insured. It is available from many carriers via endorsement for an additional premium. It can apply to both physical damage and Business Interruption losses. However, the scope of coverage can vary significantly across carriers as to what utility services are included, whether transmission lines are covered and what triggers the policy in the first place.
For more information and advice on purchasing “off-premises power outages” coverage, contact your WGA Client Executive.
About the Author
Rick Black is a Senior Vice President at WGA, with a focus on Property and Casualty Insurance. He joined WGA in 2007, bringing with him 30 years of insurance experience in all areas of complex risk and risk financing. Mr. Black is a co-leader of WGA’s Connecticut operation.