BOSTON – Insurance coverage for the interruption of business has many variables and insurers and companies are re-examining policies in the wake of Superstorm Sandy and other extreme weather events, according to the Dec. 13 issue of The Standard, New England’s insurance weekly.
“Business interruption coverage is a must for all business owners. However, it may be insufficient for all hurricane losses,” according to the article “Looking at the State of Business Interruption Coverage After Sandy” in The Standard.
While the coverage typically applies to interruption due to physical damage from a storm, additional coverage is needed for such interruptions as power outages.
Other “extraordinary costs” associated with a storm generally require complementary coverage. Those costs may include expenses related to a major cleanup, including costs for rental equipment, relocating to temporary space or overtime pay for employees.
Indirect business interruption is also a factor to consider in updating insurance coverage.
“After Sandy, many insureds had contingent business interruption claims due to power and transportation disruption and supply chain disruptions,” according to The Standard.