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HURRICANES & BUSINESS INCOME Author: VU Faculty The ISO business income form(s) includes coverage for loss arising out of a civil authority prohibiting access to the insured's premises due to direct damage by a covered peril to property at that location or elsewhere. However, what if the civil authority doesn't specifically prohibit access to the insured's property, but rather to the insured's products? Intrigued? Then keep on reading....
Q
LOUISIANAAGENT
"Here's a question that comes from a situation we encountered at an agency in the area affected by Hurricane Frances on the East Coast. It's a Business Income situation. Lots of hurricane damage in the area. The county issued an emergency order that no alcoholic beverages can be sold until the catastrophe is over. The insured owns a pub and, due to the order, cannot operate his business (this is what he says, although sodas, etc. may be sold). The order is issued because of the hurricane...however, does the Civil Authority under the Additional Coverages in the Business Income Coverage form apply or not?"
A
This is an interesting twist on the civil authority coverage where the local government doesn't expressly prohibit access to the premises but effectively does so by ordering that the insured's primary product cannot be sold. We ran this by the VU faculty and below are their unanimous opinions.
