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As insurance claims increase, many apartment owners are wondering, why? By
DAVID E. MOORE, Jansen/Adjusters International
2022 Outlook for Business Interruption Claims
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usiness interruptions aren't isolated to pandemics and global shutdowns. Natural disasters, fires, flooding and vandalism continue to interfere with operations and prompt the filing of claims. Companies that survived the last two years are hoping to return to some sense of normalcy in 2022. Being able to count on the commercial insurance they invest in when times are difficult is part of that desired scenario. Here is the outlook for business interruption claims in 2022 and why you should get a headstart on your disaster planning by having insurance professionals you can count on should you have to file a claim. Unpredictable Weather Events In 2020 and 2021, our nation dealt with the devastating impact of back-to-back hurricanes followed by Hurricane Ida for Louisiana residents. Then, an arctic freeze blast brought havoc to much of the country, including Texas. This historical data will undoubtedly influence how your business interruption claims get calculated in 2022. When Hurricane Laura made landfall in Cameron, Louisiana in August 2020, nearly one million residents lost power. Many tenants were displaced, leaving the multifamily industry with serious business interruption issues. Six weeks later, Hurricane Delta made landfall near the vicinity of Hurricane Laura, making it difficult for insurance companies to know
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where Hurricane Laura’s damage stopped and where Hurricane Delta’s damage began. While claims related to Winter Storm Uri backed up major insurance companies, Hurricane Ida further strained insurance companies’ resources, leading to several complaints, primarily with the Louisiana Department of Insurance. For that reason, even with extended business interruption coverage, it took far longer than the extension period for many multifamily owners to recover. Without a public adjuster or attorney on speed dial, several property owners could not agree to the scope of damage before the next disaster hit. Unfortunately, that meant that their insurance policy did not get reinstated in time to receive compensation for “loss of rents” from both storms. However, if a storm hits in 2022, it is possible to have your policy reinstated — as long as you and your carrier can agree on the scope of damage before a second potential major event hits. A Pandemic Economy The pandemic caused businesses to have to make adjustments virtually overnight. Supply chain issues brought a halt to some industries, such as construction. Restaurants and event venues couldn't remain open because of limits placed on seating. The economic disruption due to COVID-19 led many companies with business interruption insur-
March 2022
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