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The Calm Before The Storm Is the Time to Consider Insurance Coverage

BY Roberta D. Anderson
November 02, 2014

In Part One of this article (available at http://bit.ly/1vCQByq), we discussed the fact that, although there were no major hurricanes in 2013, the calm before the next storm is an opportune time for a company to consider the adequacy of its insurance program. We presented an overview of two common insurance-related considerations that may assist companies to maximize insurance recoveries in the wake of the next major storm event or other natural disaster. We discuss more considerations herein.

Look Out for Potential Causation Issues

In the case of Superstorm Sandy and other natural disasters, there may be multiple causes of loss. These may include wind, flooding and actions of civil authority. Identifying the cause or causes of loss is important because policies sometimes exclude or sublimit coverage for certain causes of loss, but not others. By way of example, as noted in Part One of this article, property policies often exclude “flood” or contain sublimits applicable to “flood” that are substantially lower than the otherwise applicable policy limits. Likewise, “named” windstorms such as Superstorm Sandy may be subject to higher self-insurance features. Sandy has presented numerous complex factual and legal issues surrounding the distinction between “windstorm” and “flood” damage.

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