The human toll from the catastrophes caused by earthquake and tsunami devastating the east coast of Japan has numbed the world. Obviously, the immediate collective focus must be on aiding the survivors and controlling the cascading damage. Indeed, given the scale of the destruction, attention to matters like insurance coverage for the widespread commercial destruction is largely impossible at present, as affected properties are still inundated with water or are otherwise too dangerous to access.
Nonetheless, as with the attacks of September 11, 2001 and the 2005 hurricanes in the Gulf of Mexico, the tragic events in Japan will spawn many commercial insurance claims. As with claims stemming from earlier disasters, many of the claims will be Business Income (or Business Interruption) claims, seeking loss of business profits arising from property damage or other commercial dislocations. Further, as with claims stemming from previous mass catastrophes, many of these claims-especially the large ones-will be strenuously resisted by insurance companies.
The following is a short treatment of Business Income insurance and the coverage issues that can arise under various Business Income provisions. The aim of this treatment is to make commercial policyholders aware of the types of coverage they may have purchased and that may apply to losses stemming from the events in Japan, so that they may give proper notice now and, later, at the appropriate time, pursue the coverage.
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