Ensuring Contingent Business Interruption Coverage

Today, Insurance Law360 published a piece that I wrote regarding contingent business interruption coverage.  Are you wondering what is contingent business interruption insurance, and whether your business needs it?  I gave an overview of the coverage in the article:

First, an overview of contingent business interruption coverage. “Regular business-interruption insurance replaces profits lost as a result of physical damage to the insured’s plant or other equipment; contingent business-interruption coverage goes further, protecting the insured against the consequences of suppliers’ problems.” Archer Daniels Midland Co. v. Hartford Fire Ins. Co., 243 F.3d 369, 371 (7th Cir. 2001) (“Archer v. Hartford”).

Often times, however, when policyholders ask their insurers to cover losses stemming from contingent business interruption, the insurers refuse, asserting that there must have been a “total cessation” of business operations.  Insurers consistently argue that if there was no “total cessation” of business operations, they are not obligated to provide contingent business interruption coverage.  The insurers’ arguments, however, are wrong.  As I conclude in the article (advice that applies to many situations in which insurers have denied coverage for claims for their corporate policyholders):

In insurance coverage litigation regarding contingent business interruption losses, it is important to turn a critical eye on insurers’ arguments if they have denied coverage.

For the full article, click on over to Insurance Law360.com.

myspace profile views counter

Disclaimer:

This blog is for informational purposes only. This may be considered attorney advertising in some states. The opinions on this blog do not necessarily reflect those of the author’s law firm and/or the author’s past and/or present clients. By reading it, no attorney-client relationship is formed. If you want legal advice, please retain an attorney licensed in your jurisdiction. The opinions expressed here belong only the individual contributor(s). © All rights reserved. 2009.

Advertisements

5 comments

  • Pingback: Conflicts, mediation, and contingent business interruption insurance. « Corporate Insurance Blog

  • Pingback: My Insurance Reports, Life Insurance, Car Insurance, Auto Insurance, Health Insurance, Travel Insurance, Insurance Quotes, Home Insurance : My Insurance Reports

  • I like what you say. I have to agree this is right on target. Thanks Joanne Watters

  • Hi Scott,

    Not quite sure how I found this post over the main article, but can I say that it was just great when I got there evntually. A lot of businesses fold because of inadequate or a complete lack of business interruption insurance. Hopefully this article will bring a little more attention to a much ignored type of insurance for business.

  • Nice …. Thanks

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s