Think Your Business Interruption Coverage Does Not Cover Hurricane Flood Damage – Look Again

J.P. Gonzalez-Sirgo
Founder of J.P. Gonzalez-Sirgo, P.A.

The insurance industry generates a fair percentage of its profits from the failure of policyholders to pursue legitimate claims or to proceed with claims when insurance carriers deny coverage or offer inadequate compensation.  A common scenario involves an insurance carrier denying a claim based on a specific exclusion or condition in the policy.  There are many situations where one section of a policy would appear to deny coverage while other provisions within the policy indicate a claim is covered.  Policyholders who suffer significant damage should never simply accept the first denial received from their insurance company. 

A common example of this situation might include a small business owner who receives a denial letter that indicates flood damage caused by a hurricane is not covered.  Many insurance carriers might be inclined to send just such a denial letter because most commercial policies do not include flood damage.  When you cannot operate your business in the aftermath of a hurricane, the lost profits and business relationships during the period a business is closed can lead to failure of the business.  In this situation, business interruption coverage might mean the difference between financial recovery of your business and business failure.

Even if your policy does not cover flood damage following a hurricane, you might have other types of coverage that can be used to recover lost business income.  If you have “service interruption” coverage, for example, your inability to conduct operations because of the loss of electricity might provide a basis for obtaining lost profits and other forms of financial loss to your business. 

While you might be aware that you have service interruption coverage, a form of coverage that you might not consider is “ingress/egress” coverage.  If workers cannot get to a manufacturing facility to do their jobs and suppliers cannot deliver raw materials because the roads are closed, this might allow you to seek business interruption losses under your ingress/egress coverage.

While either of these approaches might provide a way to get around the lack of flood insurance in a commercial insurance policy, a definitive answer will depend on state law and the language of your policy.  You should never assume that a denial by your insurance carrier is valid just because the carrier points to language in the policy that supports the insurance company’s position.  An insured should carefully read the entire policy to identify other language that indicates the claim is covered by the policy.  In the face of a denial, you should always speak with an experienced Florida insurance coverage attorney.

You can reach Miami Insurance Claims Lawyer J.P. Gonzalez-Sirgo by dialing his direct number at (786) 272-5841, calling the main office at (305) 461-1095, or Toll Free at 1 (866) 71-CLAIM or email Attorney Gonzalez-Sirgo directly at [email protected].

Be the first to comment!
Post a Comment