In the wake of Harvey, Irma, Jose and Maria, the 2017 hurricane season is turning out to be one of the most catastrophic on record.

To maximize insurance recoveries, businesses that have suffered property damage and business income loss will need both to act quickly and exercise long-term persistence. Key steps are outlined below:

Mind your deadlines

Almost all types of insurance policies require prompt notice of loss, and strict compliance with this condition to coverage can be critical. At this early juncture, however, policyholders should be cautious in providing any specifics concerning the cause of loss until the policy has been reviewed and all facts have been obtained. The cause of loss, in the immediate aftermath of a storm, can simply be listed as the storm itself or “the effects of” the storm.

In addition to timely notice requirements, property policies typically have several other time-sensitive requirements with which some states require strict compliance. Some examples include suit limitation provisions and deadlines for submission of a sworn proof of loss, notice of intention to elect replacement cost coverage and to complete covered repairs.

Insurance policy identification and review

Private commercial property insurance policies and flood insurance policies issued through the National Flood Insurance Program are typically the policies that will respond to most storm-related commercial losses. While this article focuses primarily on commercial property insurance coverage, many of the tips presented here apply equally to other potentially available types of property insurance coverage.

Insurance policy review should include analyzing all potentially available coverages, including for repairs or replacement of physically damaged real and personal property, as well as coverage for lost profits stemming from a slowdown or complete cessation of your business.

Coverage for lost profits and extra expenses you may incur to resume normal operations may be available to you whether or not your business actually sustained physical damage. Civil authority, ingress/egress and contingent business interruption are just a few examples of such potentially available coverages.

Important coverage considerations include:

whether the policies provide all risk and named peril coverage;
whether there are exclusions pertaining to flood or to storm surge;
how the policies define flood; and
whether the policies contain anti-concurrent causation language, which could bar coverage for a loss even if it is a result of both covered and uncovered causes.

The review also should encompass the limits, sublimits and any deductibles applicable to each potentially available coverage. Business interruption and extra expense limits and deductibles, for example, may be stated in time, amount or both.

As a related issue, the number of “occurrences” produced by a storm can affect the amount of times that limits, sublimits and deductibles are triggered. This may be significant as respects Hurricane Harvey, which made multiple landfalls over multiple days, potentially giving rise to arguments for the application of multiple “occurrences.” This can work to the benefit of policyholders and insurance companies alike, depending on the amount of the loss at stake relative to the amount of applicable policy limits and deductibles.

Many policies that provide flood coverage will sublimit it, meaning that less than full limits are available for losses resulting from flood. Policies do not define flood uniformly, and the manner in which your policy defines flood, and the case law interpreting that definition, may mean the difference between coverage and no coverage.

Preparation of the claim

Policyholders should promptly respond in writing to all reasonable insurance company requests for information; however, policyholders should not rely on the insurance company to calculate the loss. Rather, policyholders should prepare, present and defend their claims to their insurance companies.

For large losses, policyholders should consider retaining a professional claim preparer or a public adjuster. Others typically needed to round out the team include coverage counsel, forensic accountants who specializes in business interruption losses, and possibly structural or other engineers, architects and/or contractors. The policy may provide coverage for certain members of the claim preparation team, typically subject to a sublimit.

Policyholders should establish a program for regular updates to insurance companies as to the status of the claim. They should also keep detailed notes of conversations with insurance company representatives, including meeting minutes. Where there are verbal agreements, policyholders should write letters confirming such agreements and seek payment of advances for all proven and undisputed losses.

Diligent pursuit of insurance proceeds

Following a natural disaster such as Harvey, Irma, Jose or Maria, policyholders need to be diligent in pursuing insurance to help them quickly get back on their feet. Diligence in pursuing insurance involves reviewing insurance policies for all available coverages, taking stock of notice provisions and key time limitations, and taking steps to prepare, present and defend the claim. Getting these first steps right will help policyholders efficiently maximize their insurance recoveries following natural disasters.

Dennis J. Artese (dartese@andersonkill.com) is a shareholder and Peter A. Halprin (phalprin@andersonkill.com) is an attorney in Anderson Kill’s insurance recovery group in New York. Opinions expressed are the authors' own.

Special Reports /

Keys to successful property insurance recoveries following natural disasters

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