Thursday, September 28, 2017

Post-Irma Contingent Business Interruption (CBI) Claims

After Hurricane Harvey slammed into southeast Texas on August 25, 2017, our colleague Shannon O’Malley posted about the contingent business interruption (CBI) claims that would inevitably follow due to damage suffered by refining, chemical, and petrochemical facilities that supply critical products to manufacturers and other businesses across the country and around the world. (See Contingent BI: Why Do I have a Hurricane Harvey Claim from Hoboken?”)


Tuesday, September 19, 2017

Earthquakes & Hurricanes in Mexico (Any End in Sight?): Tips for International Insurers

A powerful 8.1 magnitude earthquake struck southern Mexico late Thursday, September 7, 2017. According to the U.S. Geological Survey, the epicenter of the earthquake was in the Pacific Ocean off the coast of the state of Chiapas – the southernmost state in Mexico. Because of the magnitude of the quake, its effects were felt throughout Mexico and as far north as Mexico City – 600 miles from its epicenter. Approximately 50 million people across Mexico felt the tremors from the quake. The earthquake, one of the most powerful ever recorded in Mexico, toppled hundreds of buildings, and killed at least 61 people.

Maria – Re-Post of Puerto Rico Claims Checklist

With the Imminent Arrival of Hurricane Maria in Puerto Rico, we are re-posting our claims checklist for Puerto Rico.

Maria - Concurrent Causation in Puerto Rico

While Puerto Rico was spared a direct hit from Hurricane Irma, it now appears it will face the full brunt of Hurricane Maria. Maria is projected to strike Puerto Rico as a Category 4 Hurricane. Many of the same concurrent causation issues that we predicted may occur with Irma are also likely to exist with Maria and may be even more pronounced with the increased severity of damage from Maria. 

Friday, September 15, 2017

Thursday, September 14, 2017

Will Reinsurers Sustain a Direct Hit From Hurricane Harvey?

While predictions and analyses abound regarding the potential hit from Hurricane Harvey direct insurers may take, the potential impact to reinsurers has received considerably less attention. In the aftermath of this historic storm, some are beginning to ask, “will Harvey hit reinsurers where it hurts?” The answer is: “it depends.” For some reinsurers, including the reinsurers of the National Flood Insurance Program (NFIP) and reinsurers with exposure to auto risks, the storm is all but certain to deal a significant blow. For others, however, Harvey may not pack the same punch. Uninsured flood losses and/or high attachment points may shield many reinsurers from the worst of it. For those reinsurers that are exposed, the way in which ceding carriers aggregate their claims could be crucial to determining the overall reinsurance exposure.

Monday, September 11, 2017

Why Do I Have A Hurricane Harvey Claim From Hoboken?

As businesses and insurers sort out the impacts of Hurricane Harvey, it will take time to assess the physical damage and resulting business interruption losses. Invariably, however, business interruption impacts from Harvey will not just be felt along the Texas Gulf Coast. Texas’ significant refining, chemical and petrochemical facilities supply critical products to businesses throughout the U.S. and abroad (and to each other). To the extent that those supplies are disrupted, businesses located far from the Lone Star State may choose to assert contingent business interruption (“CBI”) claims under their own first-party property policies.

Hurricane Irma – The State of Concurrent Causation and ACC Clauses in Florida

For years Florida courts were plagued by the issue of determining the appropriate theory of recovery to apply when two or more perils converge to cause a loss and at least one of the perils is excluded from an insurance policy. Florida courts developed two competing (and potentially inconsistent) theories on how to assess coverage: the efficient proximate cause and concurrent causation doctrines. In December 2016, the Florida Supreme Court in Sebo v. Am. Home Assurance Co., 208 So. 3d 694 (Fla. 2016) put an end to this decades-long debate when it formally adopted the concurrent causation doctrine in a case involving multiple perils and a first-party insurance policy.

Friday, September 8, 2017

Irma - Florida Property Insurance Claims Checklist

On September 4, 2017, Governor Rick Scott issued an Executive Order officially declaring a state of emergency in all 67 counties within the State of Florida in response to Hurricane Irma. Florida insurers are subject to various statutory/administrative provisions based on their status as either admitted carriers or surplus lines carriers. These statutes provide insurers and insureds with timelines to make and adjust claims. 

Thursday, September 7, 2017

Irma - Concurrent Causation in Puerto Rico

While Puerto Rico was spared a direct hit from Hurricane Irma, it was lashed by Irma’s wind and experienced significant amounts of rain that will likely lead to flooding. There may also be damages arising from storm surge along the Northern Coast. Reportedly, more than 1 million people are without power. Many policies may exclude flood and limit or exclude losses arising from power interruption. Combined with the significant wind damage that is expected, it is inevitable that disputes over the extent of covered versus non-covered loss will arise.

Wednesday, September 6, 2017

Irma – Puerto Rico Claims Checklist

With the Imminent Arrival of Hurricane Irma in Puerto Rico, Insurers Should Keep in Mind the Following Claim Handling Requirements from the Puerto Rico Insurance Code.

Tuesday, September 5, 2017

Concurrent Causation and Texas Law (Re-Post from August 31)

Hurricane Harvey initially hit the Texas Gulf Coast with damaging winds and storm surge. As it downgraded to a Tropical Storm, Harvey dumped the highest amount of rainfall on the Houston area ever recorded from a single storm, resulting in record flooding. In analyzing Harvey claims under a property insurance policy, standard residential policies exclude flood, and most commercial policies either exclude or sub-limit flood damage.

HB1774 - Insurers May Elect to Adopt Adjusters’ Liability

The applicability of Texas House Bill 1774 to Hurricane Harvey claims has been a hot topic in the press and on social media. This legislation, which became effective on September 1st, will apply to all Hurricane Harvey lawsuits filed on or after that date. It will also apply to all hail and windstorm lawsuits filed after September 1st. The legislation changes nothing with respect to the work of adjusters handling Texas insurance claims. As always, adjusters should continue to adjust Hurricane Harvey claims promptly, fairly, and consistent with policy terms.

Monday, September 4, 2017

First Harvey Lawsuit Filed to Beat New Texas Law

Late Thursday afternoon, a Dallas law firm filed a lawsuit to circumvent a new law that went into effect on Friday, September 1. The newly passed law, HB1774, was meant to curb hail lawsuit abuse, but after Hurricane Harvey some industry representatives raised concerns that plaintiff attorneys might use the tropical storm as a way to overwhelm carriers with damage claims.

In the complaint, Sunbelt Trees, LLC v. EMC Insurance Companies and Employers Mutual Casualty Company, the plaintiff alleges damage ranging between $200,000-$1,000,000 and loss of use of its tree farm due to Hurricane Harvey and states that while a claim was filed with the defendants, no payment had been made as of the date the lawsuit was filed. In addition, the plaintiff seeks pre-judgment interest, punitive damages and attorneys’ fees.

According to Steven Badger, a partner with Zelle LLP’s Dallas office, there is absolutely no reason that a Hurricane Harvey lawsuit should have been filed prior to September 1st. “The insurance company hasn’t even adjusted the claim yet,” said Badger. “How could it have breached the insurance policy? How could it have violated the Insurance Code or DTPA? Obviously, it hasn’t.”

Sunday, September 3, 2017

Texas Department of Insurance Declares Harvey a Catastrophe

As anticipated, on Friday, September 1st the Texas Department of Insurance issued an order declaring Harvey a catastrophe, thereby extending claims handling deadlines under §542.059 of the Texas Insurance Code. Our simple reference chart reflects the extended deadlines. Click the highlighted link above to access it.

A copy of the TDI’s order can be found here.

Friday, September 1, 2017

Concurrent Causation in Louisiana: The Basics


  • Anticipated damage from Hurricane Harvey is expected result from wind, wind-driven-rain, and flood. Under most policies, damage caused exclusively by wind or wind-driven rain is recoverable, but damage caused exclusively by flood is excluded or sub-limited. Where possible, Louisiana courts apportion between wind damage and flood damage.
Continue reading.

Summary of Texas First-Party Claims Handling Deadlines for Hurricane Harvey Claims

The Texas Insurance Code provides various claims handling deadlines for both admitted and surplus lines insurance carriers. These deadlines have been accumulated in a simple reference chart. It is important for insurance companies and their adjusters to comply with these deadlines to ensure the prompt adjustment and payment of claims and avoid any statutory penalties.

A New Arrival Threatens Mexico’s Tourism Industry: Tropical Storm Lidia

Tropical Storm Lidia may be in the shadows of the extensive Hurricane Harvey coverage, but it is certainly nothing to ignore. While news of the floods and devastation in Texas dominate the media outlets, Tropical Storm Lidia is bound to leave its mark by the sheer potential for large-scale property damage to Los Cabos’s bustling hospitality industry. 

The Texas Supreme Court’s Harvey Orders do not Delay the September 1 Effective Date for HB1774 (Section 542A of the Texas Insurance Code)

We have issued several posts and comments regarding misinformation that has been distributed concerning HB1774 and the new Texas Insurance Code provisions that go into effect on September 1st. Unfortunately, more misinformation is starting to surface — the idea that the recent Texas Supreme Court orders extending statutes of limitations and “deadlines and procedures” due to Harvey serve to delay implementation of the new law. They do not.