Insurance Coverage for Business Losses from Sandy
If you were among the many business owners in our region that were adversely affected by Hurricane Sandy, then you may have a claim under your Business Owner's Policy (BOP). A BOP policy contains a package of various types of coverages. I recently checked my policy and believe that I have three types of applicable coverages. I hope the below discussion of my findings is helpful for you to figure out whether you have any viable claims.
The first and most obvious is a claim for business interruption coverage. My traffic lawyers fight any type of moving violation issued anywhere in New York State. We were without power for one week and, as a result, the landlord closed our building. During the closure, I continued to incur indirect costs such as rent and salaries, despite the fact that our office was not operational and most of my staff couldn't do any their work. While most policies have a 1-, 2-, or 3-day waiting period, in my case (and many others), the waiting period was satisfied when we lost power for such a long time. In addition to the lost indirect costs, I also think that I can show a loss of revenue based on comparisons to other periods of time. Loss of revenue is also covered by most policies with business interruption coverage.
The next type of coverage is called dependent property. Generally, a dependent property is a location upon which your business relies for revenue. In my traffic law firm's case, there are two traffic courts that were closed on the day of the storm through November 26, 2012. A third traffic court (my main one) in Manhattan remains closed. My business is losing revenue due to these closures. I know that such a claim is viable for us because, following 9/11, we recovered $10,000 when this same traffic court (located just blocks from Ground Zero) was closed for an extended period of time.
Finally, I observed coverage for off premises utility. As best I can discern, this coverage is for loss of utility service (other than at my office) that causes a loss. To me, this appears to be similar to dependent property coverage but certainly we'll be filing a claim under both theories.
We haven't heard back from the insurance company regarding our claim but I'm told that it may denied because we didn't have flood coverage. As the argument goes, the closures and utility disruptions were as a result of flooding and therefore are not covered. I'll keep you posted. Meanwhile, if you think that you have a claim, then you should file it via certified mail immediately (and make a copy of your letter). A delay in reporting your loss could result in a denial of coverage.