There has been a drumbeat of news reports about Wuhan, China, a city more populous than any in the United States, which is in effective lock-down because of the coronavirus. Foreign nationals are being evacuated, travel has been restricted, and business is at a standstill. At a time like this, preserving public health is the highest priority. But businesses, both local and global, are also affected by shut-down orders, disruptions to their supply chains, mass sick days, and loss of business. Many, especially providers of hospitality or health care, may face elevated liability risks for exposing others to a contagion. It is important to remember that insurance may be available to meet these risks.
Articles Posted in Business Interruption
The Insurance Implications of Hurricane Season Should Be a Concern Year Round
Hurricane Barry provides the latest reminder of insurance precautions that should always be top of mind for business owners in coastal areas. In “Hurricane Barry: Prepare Now to Maximize Insurance Recoveries,” colleagues Tamara D. Bruno, David F. Klein, Joseph D. Jean and Vincent E. Morgan provide a list of helpful reminders and immediate and proactive steps one should take to maximize insurance recovery before, during and after a tropical storm or hurricane makes landfall.
Unjust Enrichment – How Property Insurers Use It to Deny Covered Losses
Imagine your organization has suffered significant property damage and interruption to your business as a result. The cause could be anything—a natural disaster, severe mechanical breakdown or a cyberattack. You notify your property insurance carrier and adjust the claim, submitting calculations of your losses based on the policy’s coverages and other terms. But in response, your carrier only agrees to pay a fraction of the losses, claiming that otherwise your organization would be better off than before the damage—“unjustly enriched”—and that insurance is not meant for gain, but only to put the insured in the position it would have been without the damage.
Natural Disaster Necessities: Property Damage, Business Interruption and CBI Coverage
Volcanoes, hurricanes, and polar vortexes—oh, my! From the ongoing eruption of the Kilauea volcano in Hawaii, to huge winter storms, massive mudslides, and the unfortunately reliable hurricane season, it seems like natural disasters have been near constant over the past year. In addition to the catastrophic toll these events take on people and communities, the toll on a business can be high. Understanding the full range and implications of your company’s risks, and putting the right coverage in place to protect against those risks, is vital. When a natural disaster strikes, having appropriate levels of property damage, business interruption and contingent business interruption insurance can be three keys to stability.
Artificial Intelligence: A Grayish Area for Insurance Coverage
Artificial Intelligence (AI) is a hot topic in industries from manufacturing to the medical profession. Developments in the last ten years have delivered AI technology, once a fiction reserved for the movies, to private corporations and even to everyday homes. Examples include:
- 2004 Defense Advanced Research Projects Agency (DARPA) sponsors a driverless car grand challenge. Technology developed by the participants eventually allows Google to develop a driverless automobile and modify existing transportation laws.
- 2005 Honda’s ASIMO humanoid robot can walk as fast as a human, delivering trays to customers in a restaurant setting. The same technology is now used in military robots.
- 2011 IBM’s Watson wins Jeopardy against top human champions. It is training to provide medical advice to doctors. It can master any domain of knowledge.
- 2012 Google releases its Knowledge Graph, a semantic search knowledge base, likely to be the first step toward true artificial intelligence.
- 2013 BRAIN initiative aimed at reverse engineering the human brain receives $3 billion in funding by the White House, following an earlier billion euro European initiative to accomplish the same.
- 2014 Chatbot convinced 33% of the judges it was human and by doing so passed a restricted version of a Turing Test.
Not Quite So Limited: Are Sublimits Sure to Limit Your Level of Coverage?
A critical component of any insurance policy is of course its limit, which is usually the most an insurance company must pay for a loss. But many property insurance policies include “sublimits” that provide a lower limit for particular losses.
Identifying the sublimits in a policy is usually straightforward since they typically appear in a list or chart in the policy’s declarations section. Sublimits generally fall into one of two types: (1) sublimits that apply to particular perils, like flood, Named Storm or earthquake; and (2) sublimits that apply to a type of damage or cost, like debris removal or preservation of property. There are many different perils and costs that a policy may sublimit, and sublimits appear in many types of policies (including, for example, sublimits for coverage for wage and hour claims under an employment liability policy). However, this blog will focus on property policy sublimits. Because many property policies include sublimits that apply to storm-related losses, they may particularly be an issue for companies damaged by hurricanes like 2017’s Harvey, Irma, Jose and Maria.
Understanding Business Interruption Insurance and Wide-Impact Catastrophes
In the wake of Hurricanes Harvey and Irma, policyholders can expect insurers to put forward strong objections to some of the most consequential claims asserted by insureds. In a recent client alert, our colleagues Joe Jean and Vince Morgan provided insight into business interruption insurance and dealing with the aftermath of wide-impact catastrophes.
Hurricane Harvey and Irma: Is Your Company Prepared for a Disaster?
An unexpected or catastrophic loss can force any company out of business, even if it is insured. You must understand your company’s risks and how your insurance policies cover those risks in order to manage them and maintain stability.
Having the correct insurance in place is only the first step. Property and business interruption insurance policies are often complex, and your suppliers, customers and other business partners’ insurance situation may have a direct impact on you as well. Even if your business doesn’t suffer any direct physical damage to its facilities following a natural disaster or other loss, your customers or suppliers may have, and that could result in what is known as a “supply chain” or “contingent business interruption” loss of revenue and sales. If you are unprepared when a disaster strikes, you may miss out on substantial amounts of insurance coverage to which you may be entitled. The time to prepare is before a disaster occurs. Take the time now to understand your insurance coverage and other risk transfer methods and opportunities. Know your rights. And put a plan in place to protect yourself, your employees, and your property before the loss occurs. Then, if disaster strikes, you’ll be in a better position to make it through and to access your insurance coverage to help restore operations.
Hurricane Harvey: Insurance Implications
As the powerful storm that is Hurricane Harvey looms in the Gulf of Mexico, Houston attorneys Vince Morgan and Tamara Bruno discuss what businesses and other organizations in the affected area should do immediately in order to maximize insurance recovery.
Key Takeaways:
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- Category 3 Hurricane Harvey is projected to have sustained winds of 120 m.p.h. and disastrous amounts of rain, with a possible storm surge.
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- Business interruptions are already happening in advance of Harvey’s landfall.
- Policyholders should take key steps to maintain and maximize insurance coverage for Harvey-related losses.
Who Cares about an Oxford Comma? A Maine Dairy Receives a $10 Million Lesson in Grammar and Ambiguity
A panda is sitting in a bar, polishing off his dinner. He pulls out a gun, fires a shot in the air, and heads toward the exit. A stunned waiter demands an explanation. The panda pauses at the door and tosses the waiter a badly punctuated wildlife manual. “I’m a panda—look it up.” The waiter turns to the appropriate entry: “Panda. Large black-and-white bear-like mammal, native to China. Eats, shoots and leaves.” [1]
Beware the missing Oxford comma!
That was the lesson of a recent decision by the First Circuit Court of Appeals, which held that the omission of an Oxford comma in a Maine employment statute created an ambiguity that must be resolved in favor of dairy delivery drivers. For want of a comma, the dairy is out $10 million.