Business interruption coverage can be vital in mitigating the income losses incurred following a hurricane, terrorist attack or other disaster. In recent years, this has been proven time and time again with Hurricane Katrina, September 11 and the four hurricanes that ravaged Florida in 2004-all grinding operations to a halt for countless companies.
Of course, your company is already protected by business interruption coverage, so you have nothing to worry about. Or do you?
Risk managers should not assume that their company is covered for all types of interruptions, even if they have purchased a policy with seemingly comprehensive business interruption coverage. In some cases, policyholders have found themselves left without coverage even though they purchased business interruption coverage with civil authority, ingress/egress and contingent business interruption provisions. Depending upon the subtle differences in the specific nature of the interruption, the language of the insurance policy, and the court’s interpretation of that language, you may not be covered.
For more insights on the issue of risk management as well as how it impacts business continuity, be sure to read A Risk Management Approach to Business Continuity: Aligning Business Continuity with Corporate Governance.