While Colorado Revised Statute § 13-80-101(1) provides that a lawsuit based on a breach of contract must be brought within three years after the cause of action accrues, Colorado allows insurance companies to shorten this period within the insurance contract to as little as six months from the date on which the damage occurred.1

Restaurants are prime targets for hackers. Restaurants gather customer credit card information on a daily basis and are responsible for storing and protecting that information. All restaurant owners should have insurance policies that not only cover their physical property damage and business interruption in case of property damage, but data breaches as well. Data breaches, as explained in my earlier blog, are usually not considered “tangible property” and are therefore not covered under most basic property insurance policies.
Continue Reading New York Restaurant’s Data Breach Not Covered Under Their Business Owners Policy

The U.S. Virgin Islands holds a special place in my family’s heart. Nothing makes my wife Ashley and I happier than a sail full of trade winds carrying us to the next secluded cove or rowdy beach bar. While most of the national media focused on Hurricane Irma’s trek toward Florida, it is now clear that St. Thomas and St. John took the brunt of the storm while still a Category 5.
Continue Reading Business Interruption Will Play Big Role in Rebuilding the U.S. Virgin Islands After Irma

Business interruption coverage provides protection against loss of income when a business suffers property damage from an insured peril (e.g., fire, water loss) that interrupts the operation of the business.1 A typical business interruption policy form provides that the insurer will pay the actual loss of business income the insured sustains during the necessary suspension of its operations during the “period of restoration.”2
Continue Reading Business Interruption Claims – Calculating The Period of Restoration

Although they typically insure personal property owned or used by insureds while it is anywhere in the world, most homeowner insurance policies contain a special limitation of liability for “business” personal property. For example, under the 2011 edition of the ISO Homeowners 3-Special Form, property on the residence premises used primarily for business purposes is limited to $2,500, while property off the residence premises used primarily for business purposes is limited to $500. The form defines “business” as

  1. a trade, profession or occupation engaged in on a full-time, part-time or occasional basis or
  2. any other activity engaged in for money or other compensation subject to certain exceptions.1

Continue Reading When Does Business Personal Property Become Personal Property?

Maximizing recovery after a catastrophic loss requires expertise in preparing hospitality business interruption claims, combined with a thorough understanding of the hotel’s unique market and operation.

Continue Reading Considerations for the Hospitality Industry – Understanding Business Interruption Claims, Part 58

Most commercial landlords require new tenants to purchase a property insurance policy that will provide coverage during the tenants’ lease period. By requiring the tenant to purchase property insurance, the landlord does not bear the responsibility of purchasing a broad, all-encompassing insurance policy – an “all risk” policy – that would cover every possible activity that could take place on the landlord’s property. All risk policies tend to be expensive, and instead of passing that cost to the tenant, the tenant can purchase a less expensive insurance policy tailored to his business. However, as the landlord in the case below discovered, just because a tenant purchases an insurance policy does not mean all the landlord’s property interests are properly covered.

Continue Reading How to Properly Protect a Landlord’s Property Interests in Texas through a Tenant’s Insurance Policy

The Fifth Circuit Court of Appeals recently issued a 21-page opinion in the case of Consolidated Companies, Inc. v. Lexington Insurance Company, No. 09-30178, ___ F. 3d ___ (5th Cir. August 17, 2010). The opinion is dense, to say the least, but it resolves an issue that sometimes can make or break a settlement in business interruption claims.

Continue Reading Court Reduces Continuing Charges and Expenses From Net Profits When a Business Resumed Partial Operations After a Loss – Understanding Business Interruption Claims, Part 35

*(Note: Bob Glasser is a managing director at BDO Consulting, a division of BDO and Seidman, LLP, in the New York office. Mr. Glasser is a certified public accountant, a certified fraud examiner and a certified insolvency reorganization accountant, with more than thirty years of diverse financial management and accounting experience at public and private companies. Mr. Glasser leads the firm’s New York Insurance Claim Services practice).

Most CFOs and risk managers have an understanding of their property and liability insurance needs and dollar limits and are comfortable purchasing coverage that protects their companies from a loss due to an insured peril. However, it has been my experience that their comfort level drops dramatically when it comes to business interruption coverage and limits. The uncertainty surrounding business interruption coverage, extensions of coverage and respective limits of that coverage consistently results in many middle-market organizations finding themselves underinsured and short of cash when faced with a major loss. Even the fortunate CFOs and risk managers who have not experienced a major loss may eventually discover that they have been significantly overinsured for business interruption losses and paying unnecessarily higher premiums for their coverage. Of course, the more devastating situation is finding out after a shutdown of operations from a loss that company management has not mitigated the company’s risk of lost profits and now has insufficient coverage to protect profits and cash flow during a potentially long period of restoration.

Continue Reading How to Prepare for the Hurricane Season and Avoid Being Underinsured for Business Interruption Coverage

Yesterday, Rocco Calaci posted a blog entry announcing that La Niña conditions are already being observed. While I dare not attempt to explain the mechanics of these conditions, it is generally understood that La Niña is a climate phenomenon that is marked by an unusual cooling of the sea surface in the Pacific Ocean, which in turn affects wind and weather patterns globally. It is also generally said that these conditions foster more frequent and stronger storms in the Atlantic Ocean and the Gulf of Mexico. As a result, NOAA has forecasted 14 to 23 named storms, of which 8 to 14 are expected to be hurricanes and 3 to 7 major hurricanes during this season.

Continue Reading Bracing for the Worst – Understanding Business Interruption Claims, Part 29