First-party policies are a valuable asset that can help your business recover from loss caused by natural disasters such as Superstorm Sandy. In this one-hour webcast moderated by a leader in New York's Building Owners and Managers Association, experienced insurance coverage attorneys and a leading insurance claims financial consultant will address the following topics to help you preserve and maximize insurance recovery: Coverage for lost or damaged property; Coverage for costs incurred to minimize damage or loss in advance of the storm; Recovery of lost business income as a result of damage to your company's property; Recovery of lost income as a result of damage to the property of your suppliers, vendors, or customers; Coverage for lost income caused by evacuation orders; Critical steps to preserve your right to insurance-including when and how to provide notice of the claim to the insurer; Practical considerations to help document, quantify, and prove your claim to the satisfaction of the insurers; and When to engage an expert to help assess loss and calculate damages.

1. Insurance Recovery for Superstorm Sandy-Related Losses
Sustained by Businesses and Communities in the Tri-State
Area
November 2012
Insurance for Property Damage and Business to conduct business (either at all or at the same
Interruption Losses levels as before); the extra expenses incurred in
dealing with the effects of a disaster, including
By all accounts, businesses and communities in
expenses incurred in advance to minimize any
New York, New Jersey, and Connecticut
damages and losses; and the costs incurred in
suffered crippling storm-related damage in the
establishing the extent of the losses.
aftermath of Superstorm Sandy. Businesses may
be severely damaged, with some unable to Scope of Losses and Coverage
reopen for months, if at all. Other businesses
It is critical that policyholders assess as quickly
may face enormous financial losses even
as possible (i) the extent of their losses and
without suffering any physical damage because
(ii) the scope of coverage for those losses.
of power outages, evacuations, halted public
Insurers will seek detailed proof of the loss
transportation, and government shutdowns or
claimed under the policy and documented
damage to facilities of key suppliers or
evidence of the expenses incurred in responding
customers. In addition, municipalities may
to that loss. Policyholders will need to
experience decreased tax revenues due to
understand fully the scope of coverage afforded
business closures. Thus, the economic impact of
by their policies in order to maximize the
storm-related losses for businesses and
potential for recovering all covered losses.
municipalities combined will be in the billions
of dollars. At least one forecasting firm predicts Policy Conditions and Requirements
that Superstorm Sandy will cost $60 billion. As Policyholders should be wary of potential time
businesses and communities seek to rebuild, traps in their policies. For example, a policy may
their financial needs will be tremendous. obligate the policyholder to provide the insurer
Many businesses and municipalities may have a with notice of a loss “as soon as possible” or “as
valuable resource available in the form of soon as practicable” after a loss or other insured
property insurance that can play an important event. Some policies require that notice be given
role in helping them recover from this disaster. in as little as 30 or 60 days. The consequences of
This insurance may provide coverage not only failure to give prompt notice differ, but a failure
for physical damage to and loss of property, but to give prompt notice may completely bar a
also for: financial losses arising from an inability policyholder’s claim.
© 2012 Dickstein Shapiro LLP. All Rights Reserved. Because of the variations in policy language, this alert does not address all issues. It also
does not replace, and should not be relied on instead of, legal advice. However, it does provide a starting point and serves as an aid in
understanding the maze of factual and legal issues regarding insurance. This alert may be considered advertising in some states.

2. Property Insurance Policies Utility Service Interruption: provides coverage
for losses that the policyholder incurs due to the
Insurance for storm-related losses can be
interruption of utility services that result from
provided under several different types of
physical damage to the property that supplies the
insurance policies, but the most common are
utility. For example, if a storm results in your
first-party property policies that protect a
business losing electrical service, and your
policyholder’s place of operations and inventory
business then incurs losses because of the
and provide coverage for lost or damaged
interruption of service, you could make a claim
property. Many property insurance policies are
under this coverage. This coverage usually is
sold on an “all risk” basis, meaning that they
provided through an endorsement to a property
cover losses to real property caused by any peril
policy and may require that the interruption of
not expressly excluded. Because of the breadth
service have lasted a minimum amount of
of coverage afforded by an “all risk” policy,
time—usually 24 hours. Utility Service
once a policyholder shows that it has suffered a
Interruption coverage also can vary widely with
loss, the burden of proof shifts to the insurer to
regard to what types of utilities are covered.
show that the loss is not covered. By
comparison, a second type of property Civil Authority: protects the policyholder from
insurance—a “named peril” policy—covers only losses caused by the inability to access its
those perils expressly listed. Because both types premises when a civil authority denies such
of policies may contain exclusions to coverage, access because of covered damage to, or
it is important for a policyholder to carefully destruction of, property belonging to third
review all aspects of a policy to determine if parties. Some civil authority coverages require
coverage for the specific loss is clearly physical damage to the policyholder’s own
excluded. premises—others do not. A “civil authority” for
purposes of this coverage may extend beyond
Additional Coverages, Including Business
federal and state governments. For example,
Interruption and Extra Expense
after the 9/11 terrorist attacks, some
In addition to covering property damage, many policyholders successfully argued that the
property policies also provide some or all of the baseball commissioner’s cancellation of games
following coverages designed to help the constituted an order of a civil authority.
policyholder recover for other losses caused by
Ingress/Egress: protects the policyholder against
the storm:
lost business income and extra expense when the
Business Interruption: reimburses the policyholder’s premises are inaccessible for
policyholder for the profits (i.e., the amount of reasons other than an order of civil authority.
gross earnings minus normal expenses) that the This type of coverage typically requires that the
policyholder would have earned but for the property damage be located within a certain
interruption of the policyholder’s business. radius of the policyholder’s premises. Such
Business interruption coverage generally coverage may be implicated if, for example,
requires that an “interruption” result from roads or public transit providing access to a
damage to covered real or personal property. policyholder’s premises are closed and there is
Policyholders, for example, have obtained also property damage in the premises’
reimbursement under such coverage when immediate area.
widespread disasters such as Hurricane Katrina
Contingent Business Interruption: protects
and the 9/11 terrorist attacks caused business
against economic losses caused by the inability
interruption.
of the policyholder to receive a supplier’s goods
or services or the policyholder’s inability to
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3. supply goods or services to customers, thereby Other Coverages
preventing the policyholder from producing
Policyholders should remember to look beyond
and/or selling its product in the marketplace.
the coverage provided under the ordinary
Extra Expense: indemnifies the policyholder for “property policy,” to coverage that may be
the reasonable and necessary increased costs of provided under other policies, such as those
conducting its business operations due to providing insurance for “environmental,”
property damage caused by an insured peril. One “maritime,” and “warehouse” losses. Liability
example of such expense would be costs policies also may be implicated if, for example,
incurred in the installation and maintenance of a third party files a lawsuit alleging property
electric generators so the company can continue damage or bodily injury due to overflow from a
to do business while awaiting restoration of sewage treatment plant or municipal facility. It
electric service from public utilities. is important for a policyholder seeking to obtain
insurance recovery to review all of its insurance
Insurer Defenses to Coverage
policies to determine the extent of its coverage.
When a policyholder makes a claim for
Obtaining and Maximizing Insurance
coverage, insurers may raise challenges to the
Recovery
availability of coverage. For example, the
insurer may assert that an exclusion, such as the Pursuing an insurance claim following a disaster
“flood” or “water” exclusion, bars or limits often is a complex and challenging process,
coverage. The “flood” or “water” exclusion may especially when management and employees are
be very broad so as to include loss due to flood, faced with post-disaster challenges both at work
mudslide, and other types of water damage (e.g., and at home. Policyholders should consider
sewer backup or seepage). A common dispute obtaining the assistance of coverage counsel,
with regard to the application of the “water” because there are many issues that can
exclusion arises when a policy covers one significantly affect the existence or amount of
common cause of loss (e.g., wind) and excludes recovery under an insurance policy. For
another (e.g., flood). Whether an exclusion example, certain causes of loss may be excluded
applies to a loss may depend substantially on from coverage, while others are not. Resolution
what the cause of loss is determined to be, of that issue may depend not only on the law of
particularly when damage can be caused by a particular state that will be applied and the
multiple forces such as wind or floods, as is facts presented by a claim, but also on the way
common with natural disasters. The question of in which the facts are presented to the insurance
which exclusions may apply also will depend in company or, ultimately, to a court, if insurance
part on the wording of the exclusions and the litigation is necessary. An attorney may be able
applicable state’s law. to analyze how the resolution of these issues will
impact insurance recovery and help the
Companies should not assume that insurer
policyholder present its claim in a way that
defenses will necessarily defeat coverage. Each
maximizes protection under the insurance
policy requires a careful analysis, based on the
policies in light of the coverage issues.
specific policy language involved, the facts of a
company’s particular losses, and the law of the The following is a checklist of important factors
applicable jurisdiction. Careful advance to consider when analyzing a potential storm-
planning is suggested, if time permits, before related insurance claim.
any claim is made to the insurer.
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4. Checklist: Insurance-Related Steps to Take to company to determine if there is any
Maximize Coverage language releasing or giving up any claims.
 Consider and locate all possible insurance  Follow up with your insurance company
policies that may be implicated by your loss; regarding your claim.
if you cannot find them, then request a copy  Seek legal advice as appropriate.
from your insurance agent or broker.
Our Firm
 Check your policy to locate the address to
which any written notice is to be sent and Dickstein Shapiro LLP exclusively represents
provide written notice of your loss to your policyholders in coverage disputes. Firm
insurance company. attorneys have successfully resolved some of the
most significant coverage cases in the country.
 Document property loss or damage, to the Since the beginning of 2007, our insurance
extent possible, by photographing, coverage attorneys have recovered more than
videotaping, and preparing an inventory of $5 billion on behalf of policyholders in matters
damaged or lost property (check with your involving a wide range of coverage types,
insurance agent or broker for particular forms claims, and industries. Firm attorneys have
that should be used for the inventory). handled many disaster-related coverage matters,
 Keep receipts for all expenses incurred to including those related to Hurricane Katrina and
protect or repair your property and for any 9/11. Dickstein Shapiro also works extensively
additional or extra expenses. on matters involving the Federal Emergency
Management Agency (FEMA) and has the
 Provide your insurance company with a list of ability to interface directly with key decision
all expenses and determine if advance makers at FEMA. This allows for a more
approval is required before incurring any comprehensive pursuit of any claims that may
expenses. involve programs administered by FEMA.
 Review your policy to determine if there are Contact Information
any procedural requirements or deadlines. To
the extent possible, comply with all We would be happy to further discuss with you
requirements and deadlines. the insurance implications for disaster-related
loss. For more information, please contact:
 Submit proofs of loss and other documents
and submit to an examination under oath if John E. Heintz
required by the policy to obtain coverage and (202) 420-5373
payments from the insurance company. heintzj@dicksteinshapiro.com
Washington, DC
 Request partial or advance payments from
your insurance company as needed. Thomas J. Freed
 Keep notes of written and oral (203) 905-4529
communications with your insurance freedt@dicksteinshapiro.com
company, agent, or broker, including the Stamford, CT
dates and times of the conversations and the
Jared Zola
people with whom the conversations
(212) 277-6684
occurred.
zolaj@dicksteinshapiro.com
 Review checks, payments, and other written New York, NY
communications from your insurance
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