Published USA TODAY 11/12/10
Haven’t you ever wondered when you read the paper and there is a threat of something happening if there is any coverage for the financial loss of a business or bridge that had to close. Sometimes these closures are as a result of a weather alert. We see on our TV the words Warning Weather alert. The hurricane is set to hit the Florida coast by 8am tomorrow morning. The authorities have asked everyone in the area to evacuate the area immediately. And then the hurricane never hits but stores have been closed for days in anticipation of something happening. Maybe it is the bridge, as in this article, that closes due to a threat and all the money the bridge would have made by charging tolls would not be earned during the closure.
So where’s the coverage. The answer is simple–there is none. At least not with the vast majority of insurance policies. If we were going to look for coverage we would be looking at the Business Income Insurance but we would find no coverage there. Yes, the insured may be able to prove they have lost money but what they cannot prove is that they had physical loss to the premises insured by a peril insured on the policy. It is that simple. And even if, and that is a huge if, they could prove coverage exists, almost all Business Income Policies have a waiting period or a time deductible that would preclude coverage. Typically it is 72 hours but can be reduced to 24 hours or eliminated entirely.
So next time you read an article and it says there was a threat or that a business should batten up the hatches because a storm is brewing.