Disaster and Business Interruption Coverages in the Wake of Hurricane Irene & Tropical Storm Lee


Although some "high-profile" targets like downtown Manhattan and Washington, D.C. largely avoided Hurricane Irene's wrath, Irene still left a swath of major damage and destruction over a massive geographic area of New England, Mid-Atlantic and Southeastern states. Coupled with the heavy rains brought by Tropical Storm Lee shortly after, the impact of these storms has been truly catastrophic to many. As with the 2005 hurricanes in the Gulf of Mexico, Hurricane Irene and Tropical Storm Lee will spawn many commercial insurance claims, and many of the claims will be Business Income (or Business Interruption) claims, seeking to recover lost profits arising from property damage or other commercial dislocations. And like claims stemming from previous mass catastrophes, many of these claims - especially the large ones - will be strenuously resisted by insurance companies.

What follows is a short outline and summary of the coverage issues that can arise in Business Income insurance claims. The goal of this brief overview is to highlight some of the coverages that may apply to losses stemming from Hurricane Irene and Tropical Storm Lee so commercial policyholders can properly preserve and maximize their insurance for such losses.

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