Tuesday at 2 With Chip is Wednesday at 2 today because of a remote and successful GAPIA seminar yesterday. Today, I will go over three topics:

  1. The New Colorado Law Regarding Cooperation Requirements Following Loss
  2. Understanding Business Interruption Concepts
  3. Adjusting Commercial Claims Involving Leases
    Continue Reading Chip At 2 Today—-New Colorado Cooperation Law, Understanding Business Interruption Concepts, and Adjusting the Lease Exposures

We have made it to the last of the Six P’s and Six E’s, if you have been following this series of business interruption insurance. “Enough” is the last element of these. This is the concept that the policyholder must carry “enough“ insurance to collect for the loss in full. The essence of this is:

[N]ot the obvious fact that the face amount of the policy must be as great as the amount of the loss if the Insured is to collect fully. Rather it is the provision found in most Business Interruption policy forms called a Coinsurance Clause, which penalizes the Insured if the face amount of the policy does not equal an agreed percentage of the total amount at risk-the amount of money that the Earnings Stream would have produced in a period of twelve months if no damage had been suffered-referred to as the Business Interruption Value.1


Continue Reading The Last “E”—Did the Policyholder Purchase “Enough” Business Interruption Insurance to Avoid Co-Insurance or Contribution?

California Congressman Mike Thompson has filed a bill to help some business owners with business income policies collect benefits for Covid-19-related losses from their insurers.1 Here is a quote from Representative Thompson’s press release explaining his reasons for filing this federal legislation:
Continue Reading Will Recently Filed Federal Legislation for the Covid Closed Business Policyholder Have A Possibility Of Passage?

“Extra” is the E that largely stands for the concept of expediting costs which are incurred to reduce the ultimate loss. “These are out-of-the-ordinary expenses.”1 They are differentiated from the normal expenses to repair and replace damaged property covered under the property insurance policy. These expediting costs usually fall into three categories:

  1. Those that speed up the return to normal operations;
  2. Those that continue operations during the period of interruption but at a higher than normal cost;
  3. Those incurred, after operations are resumed, to refill inventory.


Continue Reading What Is the “Extra” E and Why It May Be The Most Important “E” of “The Six E’s” of Business Interruption Insurance?

The first two E’s of business interruption insurance claim theory were discussed in, The First Two Elements of The Six E’s of Business Interruption Coverage—Extent and Experience. Today, we are going to discuss the elements which are Excluded and Effort. I know I am skipping “Extra” but Extra deserves extra discussion.
Continue Reading The Excluded and Effort Elements of Business Interruption Insurance Claims Theory

The Six E’s

  1. Extent
  2. Experienced
  3. Excluded
  4. Extra
  5. Effort
  6. Enough

The essence of the Six E’s is that insureds may receive benefits to the Extent of the loss Experienced, not resulting from Excluded causes, and also for Extra expenses incurred, provided that Effort is made to reduce the loss and there is Enough insurance purchased.
Continue Reading The First Two Elements of The Six E’s of Business Interruption Coverage—Extent and Experience

Why do commercial insurance lawyers only study insurance cases? I was thinking about this while debating an excellent, but issue ignorant, insurance company lawyer about a particular coverage issue which his client promotes differently at the point of sale versus what he was arguing about the coverage. Similarly, my blog discussion of the Six P’s and Six E’s has nothing to do with insurance coverage cases, but the theory of modern business interruption. Understand the theory, how the policy should be working, and the law should catch up later and even learn from the theory.
Continue Reading Commercial Insurance Coverage Attorneys Should Learn the Six P’s—A Discussion of Productivity, Period and Profits

The Six P’s and Six E’s form a traditional framework for understanding business interruption analysis, as noted in The Six P’s and Six E’s of Business Interruption Coverage. Today, I am going to discuss the second and third P— “Property” and “Perils.”
Continue Reading What Are the Property and Perils Aspects of Business Interruption Analysis?

Business interruption issues, questions, and debates seem to be the current rage regarding property insurance coverage. There are some excellent discussions and analysis from a number of lawyers who have been involved with this field for quite some time. From reading a number of recent lawsuits, a lot of lawyers involved with some of these lawsuits have no idea what they are doing. I bet a number of company, independent, and public adjusters agree with me.
Continue Reading Business Interruption Insurance Basics and the Period to Be Measured— A Discussion of Business Interruption During Tuesdays At 2 With Chip Merlin