Hurricane Sandy has provided the impetus to review the value of Business Interruption Coverage. Commercial entities are reviewing their insurance policies, and television ads are hawking the need to retain counsel to commence actions against insurance brokers who failed to purchase the coverage for clients. Unfortunately, the existence of the coverage does not mean either the coverage will apply or that the limits of coverage are adequate. Courts strictly construe the terms of the coverage.
Since Hurricane Sandy, carriers have disclaimed coverage citing the flood exclusion if there was a flood anywhere in the office building, regardless of whether flooding directly impaired the insured’s space. Insurers have also cited the utility services exclusion.
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