On January 30, 2019, New Jersey residents suffered a tremendous loss. Marcal Paper, in Elmwood Park, New Jersey on the edge of Route 80, burned to the ground. Along with it, 80 years of a family owned business, jobs, community, and an iconic sign that lit up Route 80 were lost.
Continue Reading The Marcal Paper Fire: A Sad Demise to a New Jersey Landmark

In an unpublished decision, the Ninth Circuit Court of Appeals recently used extrinsic evidence to interpret the meaning of “direct supplier” in the context of a commercial property loss.1 I previously blogged about this case in 9th Circuit to Interpret Meaning of “Direct Supplier” In Context of a Commercial Property Loss Claim.
Continue Reading Undefined Term in Business Insurance Policy Must be Interpreted with Reference to Industry Specific Meaning to Satisfy Insured’s Reasonable Expectations

Commercial property insurance policies often include damages sustained by a “direct supplier.” As an example, an insured that sells motorcycles, might rely on a particular motor cycle part supplier to provide parts used in their motorcycles. If the motorcycle part supplier sustains a loss, it could impact the insured’s business.


Continue Reading 9th Circuit to Interpret Meaning of “Direct Supplier” In Context of a Commercial Property Loss Claim

Hundreds of thousands of businesses were affected in one way or another by Hurricane Sandy. The insurance industry estimated over $20 billion dollars in business income losses. Many have presented insurance claims for their lost profits that have been denied because the business was not completely “shut down” or it did not sustain “direct physical damage” from the storm. But the insurance company’s inquiry should not stop there, and businesses should ask for a complete evaluation of coverage under their policies.


Continue Reading Businesses Affected by Hurricane Sandy Should Reasonably Expect Recovery Under Contingent Business Insurance

The 2011 losses Japan and Thailand rippled through the oceans as many realized that our global economy had become highly interdependent and supply chain disruptions were costlier than ever anticipated. A few months ago, global insurers revamped their Contingent Business Income questionnaires and applications in an effort to understand how deeply interrelated and exposed their insureds’ supply chains are.


Continue Reading Hurricane Sandy’s Supply Chain Disruptions Will Be Significant and Complicated

I recently noted the importance of Contingent Business Income (CBI) coverage in Are Your Business Relationships Insured? – Understanding Business Interruption Claims. CBI coverage protects an insured from income losses caused by an interruption or slow-down in the operations of a “dependent business” (i.e., purchasers, suppliers, distributors or service providers). A Missouri jury understood the importance of this coverage, which I affectionately call “relationship insurance,” awarding $11 million in business income losses to a roofing material manufacturer that was affected by the shut down of its asphalt supplier.


Continue Reading Missouri Jury Awards $11 million in Contingent Business Income Case – Understanding Business Interruption Claims

When it comes to relationships, businesses are as vulnerable as people. Just like in our personal relationships, businesses depend on the performance and accountability of third parties. When relationships fail, it’s hard to get back out there. Many businesses rely on outside purchasers, suppliers and distributors on a daily basis. These relationships are often stable and reliable, but loyalties are swiftly destroyed if a partner suffers an unexpected loss or calamity and is unable to purchase, supply or distribute inventory. Unlike people, businesses can be less vulnerable by purchasing what I call “relationship insurance,” or Contingent Business Income coverage (CBI), which protects the “recipient business” from income losses caused by an interruption or slow-down in the operations of a “dependent business” (i.e., purchasers, suppliers or distributors).


Continue Reading Are Your Business Relationships Insured? – Understanding Business Interruption Claims

In the late 1600’s, at the height of a lucrative slave trade, a group of ship owners and merchants got together at Lloyd’s Coffee House in London to negotiate the first forms of insurance agreement. The merchants promised to use their private funds to pay the ship owners if the ships were attacked by pirates or damaged and sunk by weather. If the ships completed their voyage without any fires or pirate attacks, the merchants kept the fee paid by the ship owners to insure the voyage. The coffee house meetings seemed to make good business sense and a global insurance market was born. The world has changed a lot since the slave trading days, but the coffee house concepts of insurance had not changed much until recently.


Continue Reading Global Insurance Industry Transfers the Risk – Understanding Business Interruption