Losses Caused by Hurricane Isaac: Insurance Coverage Considerations

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Hurricane Isaac made landfall in Louisiana as a Category 1 hurricane on August 28 and 29. Although not nearly as powerful as Hurricane Katrina, which devastated the Gulf Coast region seven years earlier, Isaac was slow moving and produced heavy rains and sustained winds as it moved inland, causing substantial flooding and wind damage. Reports indicate that losses from Isaac could reach as high as $2 billion.

Losses will arise not only from the direct damage or destruction of insured property, but also from the interruption of business resulting from that property damage, business interruption caused by damage to the property of important suppliers, customers and other business partners, extra expenses incurred to resume normal operations, lack of access to property due to damage to buildings, roads, docks, etc., interrupted electric, gas and water services, and other circumstances depending on the particular business involved.

The business losses will take many forms, and businesses affected should, where possible, seek to maximize insurance recoveries.

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