Take Key Steps in Immediate Aftermath of Hurricane to Maximize Insurance Coverage

If and when – and only if and when – it is physically safe to do so, there are steps that a business impacted by Hurricane Ian – or by any natural disaster – can take to help maximize its potential insurance recovery for property damage and/or other losses caused by the deadly storm.

Hurricane Ian leaves behind a trail of death and destruction.

Hurricane Ian made landfall in Caya Costa, Florida, earlier this week as a Category 4 storm. After being downgraded to a tropical storm, Ian has been upgraded back to a hurricane and is expected to make landfall again in South Carolina today. North Carolina, Virginia, and several other states also appear to be in the path of this dangerous storm.

Already, according to recent reporting, the hurricane is tragically responsible for more than 20 deaths.

According to CNN, the storm is also responsible for “apocalyptic damage.” NBC News reports that approximately “2 million customers [lost] power across Florida, while many communities have had to contend with widespread flooding, destroyed homes and devastation.”

News reports, of course, are being updated continuously.

The economic impact of Hurricane Ian is likely to be billions.

According to other reports, the storm is likely to cause tremendous economic losses. In fact, according to a recent story in Claims Journal, “[e]xperts predicted insured losses from Hurricane Ian could earn a spot as one of the costliest natural disasters in history ….”

In the end, the storm almost certainly will have caused billions of dollars in damages. Citing a projection by one data firm, ABC News reports that “the economic damage wrought by the hurricane could reach up to $65 billion.” Another report states that “[a] financial ratings agency said Thursday that an initial analysis indicates insured losses from Hurricane Ian could range from $25 billion to $40 billion.”

It is not just the states in Ian’s direct path that will be affected. The storm is likely to “slow down the supply chain for Florida’s top exports,” affecting businesses far beyond the Sunshine State.

Insurance may be available to cover at least some of the damages and losses caused by Hurricane Ian.

Thankfully, for impacted businesses, insurance may be available to cover at least some of their losses. Specifically, commercial property insurance policies are likely to provide the most help. Those policies may cover, among other claims, claims for “property damage,” “business interruption,” “extra expense,” “contingent business interruption,” “utility service interruption,” and “civil authority”-related losses.

By promptly taking certain steps, policyholders can help maximize their potential insurance recovery.

To maximize the potential for insurance recovery, there are a number of key steps that commercial policyholders can take in the immediate aftermath of a hurricane (or any natural disaster), if and when it is safe to do so. For example, businesses should:

• Document all physical property damage. For instance, policyholders should take photographs of any physical property damage (g., broken windows, roof damage, flooded areas).
• Keep detailed records of any financial losses. These records can include, for example, ones evidencing costs incurred to repair damaged property and/or to continue normal business operations after suffering storm damage. They can also include other financial records, such as records of cancelled orders or lost income. These records will be helpful to later quantify the business’ total loss and total insurance claim.
• Locate insurance policies. If possible, a business should locate copies of its commercial insurance policies. Insurance brokers – or even insurance companies themselves – may be able to help with this task.
• Review insurance policies for relevant deadlines and provide prompt notice of any loss/claim. Many insurance policies require that a policyholder provide notice of a claim or loss – or take other steps, including submitting a proof of loss – within a specified time period. Therefore, it is imperative that a business review its insurance policies as soon as possible and make sure that it understands and complies with all relevant notice and similar provisions.
• Determine whether its insurer(s) has a list of approved/preferred vendors. In the wake of a hurricane, it may be necessary for a business to engage certain disaster-management/mitigation/restoration or other services. Some insurers have a list of “preferred vendors.” If the policyholder uses one (or more) of those vendors, it may receive a discounted rate from the vendor(s) and/or enhance the chance that the insurer will cover the costs of the vendor(s).
• Communicate with insurer(s). Generally, when in doubt, a commercial policyholder should communicate with its insurer(s). To the extent possible, policyholders should do so in writing, creating a record of all communications. If communications occur orally, a policyholder should keep detailed notes about those conversations.
• Consult with and engage experienced insurance coverage counsel. A business should also consider engaging experienced insurance coverage counsel to assist with these and other important tasks. In addition to providing legal advice, that counsel can help complete some of these other insurance-related tasks, freeing the business and its management to focus on the health and safety of its employees and on quickly and safely resuming operations.

In the aftermath of a hurricane, there are, of course, any number of other steps a policyholder can take to maximize potential insurance recovery, including, but not limited to, making sure to act reasonably at all times. The foregoing steps are just a starting point. That said, taking these steps should help put a policyholder in position to submit a complete and detailed insurance claim. Taking these same steps should also put the policyholder in a better position in the event that insurance coverage litigation eventually becomes necessary.

Leech Tishman’s Insurance Coverage Group can assist policyholders in Florida, South Carolina, and across the United States that have been affected by Hurricane Ian. The firm’s Insurance Coverage attorneys can help policyholders take the steps outlined above, as well as resolve any coverage disputes that occur, making sure that the policyholder receives the full benefit of the coverage it purchased and expected.

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Leech Tishman Fuscaldo & Lampl is a full-service law firm dedicated to assisting individuals, businesses, and institutions. Leech Tishman offers legal services in business restructuring & insolvency, construction, corporate matters, employment & labor, estates & trusts, intellectual property, litigation & alternative dispute resolution, and real estate. In addition, the firm offers a wide range of legal services to clients in the aviation & aerospace, cannabis, emerging cyber technologies, energy & natural resources, healthcare, and hospitality industries. Headquartered in Pittsburgh, PA, Leech Tishman also has offices in Chicago, Los Angeles, New York, Philadelphia, Sarasota, and Washington, D.C.