Hunton Insurance Recovery Blog

Recent business disruptions have highlighted  the vulnerabilities retailers face when unexpected events force closures.  Whether it’s a utility outage disrupting operations or a fire at a supplier’s facility or neighboring property cutting into sales, insurance may help cover business interruption losses.

The insurance claims process can be daunting even under the most ordinary circumstances; a catastrophic series of fires like Southern California is enduring has created extraordinary circumstances.

To help make the insurance part of the recovery process easier and answer some common policyholder questions, we’ve prepared the following guide for navigating the first steps after a wildfire:

In the year ahead, supply chains for corporate America will likely be vulnerable to disruptions arising from multiple risks—from natural disasters to geopolitical strife—heightening companies’ dependence on insurance to manage their risks. Bloomberg Law’s recent article, “Climate, Labor Disruptions Leave Companies Reliant on Insurers” features commentary from counsel Jorge Aviles on how insurance can help shield businesses from financial losses following a supply chain-related loss. “Any business with operations that rely on a supply chain should be looking into insurance coverage to manage risks.” That safety net “gives the company the confidence that it won’t be out of pocket,” Aviles says. “It gives the employees and managers and directors of the company confidence as well, and it gives your lenders and investors confidence that the company won’t be on the hook for these massive losses.” “Companies relying on such coverage should keep in mind the tiers of suppliers,” Aviles said. “A policy might offer coverage for a direct supplier, for example, but not an indirect supplier that’s disrupted.”

If your company has been impacted by today’s network outage issues, know that insurance may be able to help. Many, but not all, cyber and technology errors and omissions (“Tech E&O”) insurance policies include broad dependent business interruption coverage for losses caused by system failures of a company or vendor on which you rely to operate your business.