It turns out that January’s polar vortex lived up to its ominous-sounding name. While Florida may have gotten off easy, cold weather and extreme conditions in most of the rest of the country prevented people from getting to school or work, increased traffic accidents, stranded motorists, and damaged buildings. As you might imagine, this means that a lot of business owners have filed business interruption claims recently.
According to Insurance & Financial Advisor, four separate stretches of winter weather hit the U.S. in January, leading to the snow, ice, freezing rain, sleet, and unbearable wind chill that forced some schools and businesses to close for days or weeks at a time. All the traffic delays, property damage, and other economic losses totaled $3 billion, with insured losses accounting for more than $1.4 billion.
Types of Winter Business Interruptions
There are about as many different types of winter business interruptions as there are descriptors for inclement winter weather (read: a lot). Typically, business interruption insurance covers lost income if a company has to vacate their premises as a result of disaster-related damage. A few issues that might lead some companies to vacate in the winter are:
Flooding. The damage that floodwater can do is all too well known by Florida business owners, but entrepreneurs living away from the coast may not have had as much practice dealing with water damage. If snow gets tracked into a building or piles up on a roof and then leaks through when the weather warms up — important documents, products, and office equipment may be damaged.
Frozen pipes. When pipes freeze, water pressure may build up and eventually cause them to burst at their weakest point. Understandably, this can cause major damage to buildings and may prevent employees from working in that space for a period of time.
Structural collapse. Most buildings in snowy parts of the country have sloped roofs to allow snow to slide off, but if a roof isn’t sloped steeply enough, the weight of the snow that collects on top of it may cause it to cave in.
Inability to reach the office. In some parts of the country, the roads have simply been too dangerous for cars to travel on, and, as a result workers have had to stay at home. While some people may be able to telecommute, others depend on being in a physical location to do their job, and companies that need their employees to be on site can take a huge hit.
Business Owners Need to Know What Their Insurance Covers
Not all of the situations described above are covered in every business interruption insurance policy, but any business owner who has suffered a loss of income due to winter weather should review their policy closely to determine if their particular case qualifies. If the business interruption is covered, the insurance company should pay out in order to help the business make up for their lost income.
Sometimes insurance companies, unfortunately, will drag their heels or look for excuses not to accept a claim because they’re trying to protect their own bottom line. Any business owners who face this kind of obstacle should talk with an insurance bad faith attorney in order to determine what kind of action they should take. Having to deal with record-breaking, extreme winter weather is bad enough—business owners shouldn’t have to fight an uphill battle with their insurance company,as well.
About the Author:
Lawlor Winston White & Murphy. He has been recognized for excellence in the representation of injured clients by admission to the Million Dollar Advocates Forum, is AV Rated by the Martindale-Hubbell Law Directory, and was recently voted by his peers as a Florida “SuperLawyer”—an honor reserved for the top 5% of lawyers in the state—and to Florida Trend’s “Legal Elite.”