Home > Property & Casualty > October snowstorm leaves many without insurance coverage

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.

617.646.0279   Rick.Black@wgains.com Connect with Rick on LinkedIn

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  1. Tom
    November 18, 2011 at 11:26 am | #1

    Rick,

    I got this response from CL&P yesterday with respect to personal losses due to the power outage. There appears to be a process to submit claims to them.

    Tom

    Connecticut Light & Power
    Thank you for your email.
    You may file a claim for losses by calling 1-800-286-2000 or 860-947-2000. The representative will take your information and mail you a claim submission form or other notification within 24 hours of the next working day. Upon receiving the claim submission form, please complete it, following the directions in the cover letter, including all requested documents. Return it along with your proofs of loss (e.g., photos, invoices, repair bills, estimates) to the address listed on the form.

    Please note that CL&P, like all other utilities, cannot guarantee continuity of service. Therefore, CL&P will not be liable for damages caused by certain occurrences that are beyond our control. For example, some common causes of claims for which CL&P is not liable include the following:
    Weather-related conditions
    Animal contacts (squirrels)
    Equipment failure
    Damage to CL&P equipment by external causes (auto accidents, trees, construction activity)

    You may wish to contact your insurance company as you may be afforded coverage under your homeowner’s or other policy. You may also qualify for food spoilage reimbursement at the Connecticut Department of Social Services. Please click on the link below for more information:
    http://www.ct.gov/dss/cwp/view.asp?Q=487040&A=4125

    Please note that completing the claim form is not a guarantee of payment. Upon CL&P’s receipt of the completed claim form and proofs of loss, your claim will be assigned to a claims adjuster, who will investigate your claim and determine if there is any liability on the part of CL&P.

    It is CL&P’s policy to respond to claims promptly and fairly. We evaluate each claim based upon the information provided and our investigation, which may involve the review of records, interviews of employees or witnesses, and a technical evaluation.

    This process can be time consuming, depending on the complexity of the incident. Our goal is to reach a final decision on most claims within 6 to 8 weeks. However, if there are complex issues involved or if we need additional information, the process may take longer.

    When our investigation is complete, we will either call you or send a letter with our conclusion. If CL&P accepts liability for a property damage claim, we will reimburse you for either the repair cost or the actual cash value, whichever is less.

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