Brokers report that interest among buyers for Contingent Business Interruption (CBI) insurance peaked after the 2011 catastrophes in Japan and Thailand. 

Superstorm Sandy has not caused a CBI demand spike to the same degree—but the event has heightened awareness among mid-sized and small companies of the limitations and exclusions on certain perils in standard Property policies, such as Flood. 

“Most larger clients have tailored policies that provide All Risk cover for CBI,” says Dave Finnis, national Property practice leader for Willis North America. “It's the middle-market, smaller commercial accounts that are on ISO forms that see the limitations. As they go back and renew, they're trying to get that [flood] coverage—with mixed results.” 

William K. Austin, principal of Austin & Stanovich Risk Managers LLC, reports that two clients located well inland in New Jersey found themselves facing losses after flooding caused by Sandy. “They lost power due to flooding at a substation,” Austin explains. “Flood exposure should be looked at even if companies don't think they have the exposure.” 

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