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. Read more…
Major interruptions to transportation services in Greece are expected today and tomorrow as a result of a 48-hour strike by public and private sector workers. According to FreightWatch Intelligence Division, public transportation and commercial flights will be affected by the strike along with ferries serving Greek islands, local and national train services. Companies transporting goods throughout this area are urged to plan supply chain activities taking into account these events.
As for potential insurance coverage in the event of a strike, most Ocean Marine (aka Worldwide Transit) policies are written in accordance with the standard policy clauses established by the American Institute of Marine Underwriters (AIMU). At the time of purchase, a client has the option to elect or exclude coverage for War, Terrorism (including TRIA) and Strikes Read more…
One of my colleagues recently posted a very good piece about what coverage is available in the wake of the torrid summer weather the Northeast had from a personal lines perspective. It got me thinking of some of the challenges that healthcare organizations face in the wake of Hurricane Irene or other natural disasters. While there will be much written about “off premises power” extensions and the great value of preparing for the protection of the lives and well-being of a providers patients (all critical issues, to be sure), I began to think about some of the nuances that non-hospital providers may be faced with in the wake of such a storm.
Most good property policies will cover losses resulting from a Hurricane Irene situation. Flood coverage, property damage and the inevitable Business Income (BI) and Extra Expense (EE) claims Read more…
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 Read more…
Numerous factors are transpiring that have resulted in strikingly higher petroleum prices, and businesses and consumers need to prepare themselves. Oil prices had crashed in 2008 due to the financial crisis and subsequent recession. The global economy continues to recover, the U.S. Federal Reserve just revised their 2011 US GDP forecast from 3.4% to 3.9%. This is in addition to emerging economies such as China and India that were relatively unscathed by the 2008 crisis and have seen GDP growth of 10%. Higher global economic activity increases demand for petroleum products which will in turn lead to higher prices.
The second and more immediate concern is the wave of political turmoil sweeping the Middle East, with populist revolts having struck Tunisia, Egypt, Libya, Bahrain, Yemen, Iran and Morocco. Read more…
The political protests in Egypt have shut down internet and other communications systems. Business has been interrupted both locally on the ground and for companies that do business with Egyptian customers. Travel companies have been unable to confirm local conditions and they have had to cancel tours. Importers have been unable to confirm letters of credit and other essential information that allows for the flow of goods from Egypt. Companies with manufacturing and distribution facilities are concerned about acts of vandalism amid the rioting.
Most of the financial losses that may result from these events are not insured by most companies. Business interruption from the shutdown of internet services or other financial services might only be insured via political risk insurance, something that is not purchased by most businesses. Actual acts of vandalism would be an exception. There may be coverage depending upon the nature of local coverage and the impact of any global DIC (Difference in Conditions) coverage.
The possible contagion of political unrest from Tunisia to Egypt to other countries has businesses reconsidering their prior decisions to self-insure these risks.
Consider the dilemma facing the CEO of BP and the CEOs of other major deep-sea drilling companies in light of the disaster in the Gulf of Mexico as they contemplate possible securities and other liability litigation. Tony Hayward, BP’s CEO, needs to protect BP’s reputation in order to maintain loyalty for its consumer products like its gas station chain as well as maintain morale among its employees. It does this by, among other things, taking a conciliatory note about the responsibility of BP to pay all types of reimbursements to the public arising out of the accident. Meanwhile, securities litigation professional plaintiff firms are taking notes that will no doubt conclude that Hayward is not best protecting shareholders by making these concessions to pay all reasonable costs.
I recently had a chance to catch up with Andrew Agnew, Chairman of Jardine Lloyd Thompson Limited (JLT Group) of London. He has almost 30 years in the insurance industry with experience in all areas of the marine and non-marine market. Our conversation was on the heels of the oil rig explosion Read more…
Last week’s groundings due to the volcanic ash cloud was expensive, and now this week everyone is looking to get paid. Airline passengers are calling on insurance companies to pay their losses, and insurers are pointing them back to the airlines. The airlines were definitely hit the worst by the week-long disruption, the estimated loss by the middle of last week was over $1.7 billion. And the airlines are the least likely to see any insurance indemnification. In order to be paid, material damage has to be present to give rise to a business interruption claim. Some cover for delay and travel abandonment may be available, but it all depends on what coverages were purchased by the policyholder. Read more…
Virtually no airline is insured against business interruptions as a result of the volcanic ash that has grounded aircrafts throughout Europe causing huge financial losses this past week. But there could be some insurance coverage available for other businesses if the volcano eruption somehow adversely effecting your revenue stream. Do you have a plant or supplier in Europe that had to shut down and cease shipping product to you due to the ash cloud? The ash cloud could be considered volcanic action which is a covered peril on many property policies. Read more…
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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.
