Hurricane Irma devastated 50% to 90% of Florida's citrus fruit —oranges, grapefruits and tangerines — and Florida is facing itslowest citrus forecast in more than 70 years. Shortly after thestorm, the state estimated that its citrus industry lost more than$750 million. Lawmakers and the Florida Agriculture Commissionerhave stated that the damage estimate may exceed $1 billion, asfruit continued to fall well after the storm passed. In addition tocitrus losses, the state estimated that Irma inflicted $180 million in damage tovegetable and non-citrus fruit growers.

Serious questions remain regarding whether Florida citrus can survive without assistance.Much of the conversation is focused on emergency assistance fromthe government. But the citrus industry and others affected by thestorms should not overlook the significant assets that may be foundin their insurance portfolios. Companies should consider coveragefor the destroyed fruit and for lost business income — both forgrowers and those whose business relies on the growers.

Related: Will business income insurance cover these 7losses?

Potential avenues for recovering propertydamage

Florida's citrus growers lost millions of dollars' worth offruit, blown away or laying unusable in the groves. Identifying theproper insurance policy from which to seek coverage will largelydepend on whether the fruit had been harvested before the storm.Fruit still on the tree is generally covered under crop insurance policies, referred to asmulti-peril crop insurance (MPCI). MPCI generally covers damage dueto strong winds, disease, flooding, and insect damage, among otherperils. (Growers should also consider MPCI in connection withcitrus greening and the lice that carry it.)

Once the citrus has been harvested, it typically becomes “stock”that is covered under a standalone stock policy or by a commercialproperty policy. Commercial property insurance is frequentlywritten on an “all-risk” basis, meaning that it provides coveragefor all loss or damages, unless specifically excluded.

Whether it lost crop or stock, the policyholder should preserveits records demonstrating pre-loss volume and how much was lost. Ifthe policy does not incorporate or set a value, the company willalso need to value the destroyed fruit. Fortunately, the value ofan orange is relatively predictable and reasonably ascertainablewithout an aging process. Accordingly, citrus growers may avoidvaluation fights with their insurers that vineyard owners havefaced in recent months.

Related: Farmers plagued by crop-killing herbicide Dicambanot covered for losses, says Risk ManagementAgency

Potential avenues for recovering lost businessincome

Companies may also recover lost profits stemming from physicaldamage to the groves or other operations. Commercial propertycoverage generally includes business income or interruption insurance (BI). BI typicallycovers lost profits due to a necessary suspension in operationscaused by physical damage to the policyholder's property during the“period of restoration.” Most courts and policies define suspensionto include a slowdown or cessation. That is, a companyneed not stop all work to qualify for BI coverage and the losscontinues until the business operations are back to the pre-losscondition. Additionally, increased expenses incurred to continueoperations or minimize the “suspension” are likely recoverableunder the Extra Expense portion of a BI policy.

The “period of restoration” or “extended period of indemnity”often is described as the period that it takes to repair thedamaged property and return the business back to its “normal” levelof operation. Ordinarily, but not always, only the losses incurredduring the period of restoration (or extended period of indemnity)are reimbursable under the policy's business interruption coverage.When calculating the period of restoration, policyholders shouldconsider how long it will take for the trees to recover from stormdamage and resume bearing fruit at the same levels they did priorto the storm, whether new trees must be planted and matured toachieve a pre-loss level operation, or for the soil to return toproper saturation levels. If a packing house was damaged ordestroyed, the policyholder should consider how long it will taketo replace the building.

Related: Is your business entitled to insurance coverage foradditional lost profits?

Recovery for breaks in the supplychain

Recovery is not limited to those businesses growing citrus inFlorida. Rather, companies that rely on citrus growers to producefruit at a certain level and to sell at a certain price may look totheir own contingent business income insurance (CBI) for recovery.CBI coverage is frequently found in commercial property insurancepolicies. CBI covers lost profits and extra expenses resulting froma break in the supply chain caused by a physical event thatimpacted a company's customers or suppliers.

For example, a food company selling orange juice may seekcoverage for decreased sales if it could not obtain the necessaryfruit from Florida to meet its normal need. Additionally, the foodcompany may seek CBI coverage for increased expenses incurredsourcing substitute oranges from a grower outside of Florida.

CBI does not require the policyholder to sustain any physicalloss or damage. It is only necessary that a non-excluded lossoccurs at a customer or supplier, which negatively impacts thepolicyholder's business to some extent. Accordingly, businesseslocated far outside of Florida may have viable insurance claimsarising from the loss to Florida's citrus businesses.

Related: 2017 natural disasters mean insurance rateincreases in 2018

Consider all options

After any catastrophic event, businesses suffering damagesshould consider all potential sources of recovery, even the lessobvious ones.

Those affected by the hurricanes this past season shouldcarefully review the insurance policies in their portfolios andmaintain records of the damage and any expenses incurred.

Related: 5 things businesses can do now to prepare forhurricanes

JaredZola is a partner in Blank Rome's policyholder-onlyinsurance recovery practice, based in the Firm's New York office.He can be reached at [email protected]. RobynMichaelson is an associate in Blank Rome'spolicyholder-only insurance recovery practice, based in the Firm'sNew York office. She can be reached at [email protected].