New York City officials were estimating that the transit strike that began today could cost the city more than $400 million daily in lost economic activity, and insurance experts said few businesses were covered for the damage.
With buses and subways idled and traffic jamming city entry points, the New York City Office of Economic Development projected the loss of business could range from $400 million to $660 million a day. OED said the loss would be between $30 million and $50 million for retail and $410 million to $610 million for non-retail.
Loretta Worters, director of public information for the New York-based Insurance Information Institute, said firms that are hurt by the job action by Local 100 of the Transport Workers Union cannot look to their business interruption coverage.
Ms. Worters, who was working from home rather than trying to commute to work, said the strike would trigger no coverage under any property-casualty insurance policies, including business interruption "which requires physical loss or damage from a covered peril."
As the strike proceeded, some businesses were closed and others experienced an inability to obtain deliveries and other problems.
Richard Lewis a partner with Anderson Kill & Olick, a New York law firm that represents policyholders, interviewed by telephone from his home in Brooklyn, said he would agree that under regular business income insurance policies, the forms normally require loss from physical loss or damage.
He said that in the past some policyholders have raised a business-interruption claim for economic loss not due to physical damage, but they have been unsuccessful in court.
However, he noted that there are certain coverage extensions businesses can obtain for problems that civil and military authorities can cope with and for difficulties with ingress and egress to a business.
"Some of those don't require physical loss or damage," Mr. Lewis said and hazarded that while such coverage is rare, it was possible that "somebody out there" has a policy involving loss of ingress or egress that doesn't require physical loss or damage.
Mr. Lewis suggested that claims might be brought against the union by injured businesses, providing the union has liability insurance.
Ms. Worters said she could not envision a business claim from the strike unless the transit workers were to actually cause physical damage by looting an establishment.
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