In the wake of the March 30 collapse of the I-85 bridge in Atlanta, Georgia Governor Nathan Deal declared a state of emergency calling for closure of both the northbound and southbound lanes of I-85 in Fulton County. A copy of the Governor’s executive order is available at the following link: https://gov.georgia.gov/sites/gov.georgia.gov/files/related_files/document/03.30.17.03.pdf.

Many businesses may be affected by the closure or I-85, a major thoroughfare in Atlanta. Their employees or customers may be unable or substantially impeded from accessing them while this portion of the interstate is closed for repair.  

This type of situation can create various commercial property insurance coverage issues, particularly implicating “ingress/egress” or “civil authority” coverage. “Ingress/Egress” coverage commonly provides coverage for business interruption loss directly caused by physical loss or damage to property, regardless of whether the insured’s property is also damaged, that prevents ingress to or egress from the insured’s premises. This type of coverage is triggered when, for example, flooding renders the only road leading to the insured’s manufacturing plant nearly impassable. See, e.g., Fountain Powerboat Indus., Inc. v. Reliance Ins. Co., 119 F. Supp. 2d 552, 554, 556-57 (E.D.N.C. 2000). Coverage questions implicating this type of coverage may arise if an insured believes the I-85 closure has prevented or impaired access to its business and caused a loss of business income.

Similarly, “civil authority” coverage generally provides coverage for loss caused by an order or other action of a civil authority which prohibits access to the insured’s premises. This type of coverage may be triggered, for example, when a government officer orders the evacuation of a particular area during a hurricane. See, e.g., Assurance Co. of Am. v. BBB Serv. Co., 265 Ga. App. 35, 36, 593 S.E.2d 7, 8 (2003). Like “ingress/egress” coverage, policy language affording “civil authority” coverage generally requires that the civil authority’s action be taken due to “direct physical loss of or damage to property.” Id.

Note, however, that at least some courts have held that “civil authority” coverage requires that the action taken completely prohibit access to the premises. It is not enough to show that the civil authority’s action merely hindered access or required the use of alternate routes to access the premises. See, e.g.,  S. Hosp., Inc. v. Zurich Am. Ins. Co., 393 F.3d 1137, 1140-41 (10th Cir. 2004); Ski Shawnee, Inc. v. Commonwealth Ins. Co., No. 3:09-CV-02391, 2010 WL 2696782, at *4-5 (M.D. Pa. July 6, 2010); Abner, Herrman & Brock, Inc. v. Great Northern Ins. Co., 308 F.Supp.2d 331, 333-34, 336-37 (S.D.N.Y. 2004). In fact, one federal district court in Georgia has held that for civil authority coverage to apply, the order must “specifically forbid[]  access to [the insured’s] premises.” Paradies Shops, Inc. v. Hartford Fire Ins. Co., No. 1:03-CV-3154-JEC, 2004 WL 5704715, at *7-8 (N.D. Ga. Dec. 15, 2004).

Following the I-85 bridge collapse, Atlanta news media have published various alternative routes and detour maps. In addition to taking alternate routes, Atlanta’s public transit system may be a viable alternative for those whose commute is affected by the collapse. The extent to which alternative routes and other modes of transportation are available may impact the nature and scope of any coverage for claimed business losses.

Ultimately, whether and to what extent commercial property insurance coverages are triggered by an event like the I-85 bridge collapse necessarily depends on a careful review and evaluation of the applicable policy language. At Carlton Fields, we provide coverage and claims counseling, litigation, and arbitration services in matters involving all types of property and casualty insurance.