Articles Posted in Property Damage

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photo looking upward and to the sky of the Illinois Supreme Court buildingThe Illinois Supreme Court has teed up a significant insurance question: Does a standard pollution exclusion bar coverage when the alleged “pollution” was not considered to be pollution when the policy issued—where the substance was lawfully emitted under an environmental permit?

The court accepted a certified question from the Seventh Circuit on April 17, 2025, in Griffith Foods International Inc. v. National Union Fire Insurance Co.—a case that springs from the Sterigenics ethylene-oxide suits. The court’s agreement to consider the question signals the potential for a landmark ruling on the scope of pollution exclusions, with far-reaching implications for companies dealing with environmental and related toxic tort claims.

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GettyImages-2016576199-e1736812078758-300x156As of January 13, Southern California’s ongoing wildfires have reportedly destroyed more than 12,000 structures. Insured loss estimates exceed $25 billion, and the strong Santa Ana winds fanning the blazes are expected to continue into Wednesday.

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milton-satellite-oct-9-960-300x200In the aftermath of two powerful hurricanes the process of assessing the damage and rebuilding begins. Businesses suffered billions of dollars in losses during hurricanes Helene and Milton, both in physical property damage and disruption of their business (i.e., lost profits). That is precisely why businesses purchase property and other commercial insurance—to indemnify them when disaster strikes. However, it is not uncommon for businesses to be unpleasantly surprised when they present a claim to discover that their insurers are unwilling to stand behind the full insurance coverage they promised. This is particularly so in the case of a substantial loss, and even more so in the aftermath of a wide-area catastrophe—such as a hurricane or other natural disaster—because such catastrophes have negative repercussions on insurers given the number of impacted policyholders.

This article highlights eight property adjustment and coverage issues. Understanding and being thoughtful about these issues now, including working with coverage counsel as appropriate, is critical to maximizing insurance recovery.

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Hurricane Helene struck Florida’s Big Bend region as a category 4 hurricane on September 25, 2024, and continued to move northeast. The storm caused widespread power outages and catastrophic damage across Florida, the Carolinas, Tennessee, Georgia and other states. It has brought life-threatening storm surges in its aftermath. Now, less than two weeks later, Hurricane Milton is making its way toward Florida’s western coast and threatens to cause additional catastrophic damage.

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The below checklist includes essential considerations and steps to take for property owners and businesses that stand to be affected by hurricanes.

  1. Make an inventory of risk pathways that could affect your business.
    • Identify essential supply chains, raw materials or parts providers and service providers to assess impact of potential disruptions.
      • Stress-test what would happen if each supply chain were interrupted.
      • Identify markets and customers whose disruption could affect your business.
    • Identify potential sources of liability if your business was impacted by the hurricanes.
      • Failure to meet contracted-for requirements
      • Failure to take adequate measures to protect customers from harm
      • Management failure to train employees to plan adequately for impacts, with concomitant claims by shareholders, regulatory authorities, customers, third parties
      • Other?
    • Identify other constituencies that might be affected by disruption to your business and risks associated with such disruption.
  2. Before any disruption occurs, identify and review insurance products that may respond.
    • First-party Property and Business Interruption insurance—for stoppage or slowdown of your own business, typically due to physical loss or damage to property
    • Contingent Business Interruption (CBI) or Supply Chain Risk insurance—for disruption of supply chains and, potentially, markets
    • Commercial General Liability (CGL) insurance—for liability to third parties arising from bodily injury or, potentially, personal injury or property damage
    • Directors & Officers (D&O), Management Liability, Errors & Omissions (E&O), and Professional Liability insurance—for claims that management personnel failed to take appropriate measures to protect the business or third parties
    • Event Cancellation insurance
    • Travel insurance
    • Workers’ Compensation insurance—adopt protocols and procedures to help employees make a record establishing work-relatedness in submitting claims
  4. Review business contracts to assess whether you are obligated to provide coverage to customers/clients, joint venture partners, contractors or others for risks outlined above.
  5. Review customer contracts to assess whether you are entitled to coverage provided by customers/clients, joint venture partners, contractors or others for risks outlined above.
    • If so, request copies of relevant insurance policies (not just certificates of insurance) and review them to assess potential coverage.
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In a recent win for policyholders, the Supreme Court of Colorado handed down a pair of decisions that extended the notice-prejudice rule to first-party property policies. Colorado law now requires an insurer to demonstrate that it was prejudiced by the insured’s late notice of a claim before it can deny coverage based on untimeliness in both property and liability policies.

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acuity-1180197583-300x200The Illinois Supreme Court handed down a big win for policyholders just in time for the holidays. In Acuity v. M/I Homes of Chicago, LLC, the court joined the mainstream of jurisdictions and reversed years-old precedent that severely limited policyholders’ ability to tap their liability coverage for construction defect and faulty workmanship claims.

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GettyImages-185062212-300x199Temperatures in Arizona this week reached over 110 degrees Fahrenheit. The water temperature in the Florida Keys was reported to reach sauna-like levels, threatening the life of habitat-sustaining coral. Atmospheric conditions are routinely blamed for violent storms and for wildfires that darken the skies.

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Sargassum-1023317486-300x200As summer vacation rolls around and hotels, restaurants and other hospitality companies gear up for a busy tourist season, coastal businesses in the U.S. Southeast, Puerto Rico and the Caribbean may be welcoming an unexpected guest—the Great Atlantic Sargassum Seaweed Belt. Businesses are bracing for this ten-million-ton mass of brown seaweed, which is floating on the ocean surface and extending from the west coast of Africa to the Gulf of Mexico.

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Loyal readers of this blog may recall our recent analysis of Norwegian Hull Club v. North Star Fishing Co., an insurance coverage dispute that appeared likely to turn on the meaning of a blank space in a very large builder’s risk policy. After bench trial, U.S. District Judge Robert L. Hinkle has filled that gap—giving the policyholders most, but not all, of the coverage that they sought. Under the judge’s decision, based upon industry custom and practice, that blank space provided the policyholder with nearly $20 million in extra coverage.

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