Winter storm Juno is expected to hit this evening and last through Wednesday, impacting businesses from the Mid-Atlantic to New England. Millions may be affected by power outages and travel disruptions, and many may suffer property damage because of strong winds, coastal flooding, ice, and heavy snow. Is your business prepared for the coming storm and the havoc it may wreak on business operations and property? Knowing your coverage rights and obligations is critical.
Policyholders should locate and analyze all insurance policies that may afford them insurance coverage. Property damage policies cover physical damage to property including, for example, a policyholder's building. These policies also may cover the costs associated with rebuilding, repairing, or replacing damaged property.
Business interruption, extra expense, and contingent extra expense coverage may provide further relief when a policyholder's and/or its vendors' or suppliers' damaged facilities cause a suspension in the insured's operations. Policyholders should identify and obtain copies of insurance policies issued to other businesses – such as vendors, current and former affiliates, and suppliers – that may provide insurance coverage to them.
As with any potentially insured losses, issues may arise regarding the cause of the loss, whether the policy excludes the loss, and what coverage limits apply to the loss. Some policies provide specific coverage for weather-related losses; others specifically exclude risks, such as flood; and still others provide limited coverage with dedicated sublimits.
Most insurance policies require an insured to provide timely notice of potential claims. Some property policies, for example, require that businesses provide notice of a loss "as soon as practicable," while others require notice "immediately." Most property policies also require policyholders to submit proof of loss arising from covered losses. Businesses, therefore, should collect and maintain records documenting their damage, lost revenues, and additional expenses, and be sure to submit all required information as and when required by their insurance contracts. To the extent a policyholder needs more time to prepare its proof of loss, it should consider approaching its insurers for additional time and confirming all extensions in writing. Policyholders also should consider asking insurers to make advances on loss payments while the insurer conducts its investigation.
Because insurance companies fill their policies with legal and technical jargon, policyholders understandably may have questions regarding the scope of coverage available to them. Businesses should consult with experienced professionals, such as insurance brokers, accounting consultants, and coverage counsel, who can help them understand their insurance, navigate the claims process, and ultimately maximize their insurance recovery.