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The Aftermath of 9/11: Courts Reject Policyholders' Attempts to Circumvent the Plain Meaning of Business Interruption Coverage
The terrorist attack on the World Trade Center resulted in a large number of business interruption claims. Stated simply, business interruption coverage is intended to pay the financial losses incurred by an insured during the period necessary to repair the damage caused by an insured loss. Typical business interruption provisions allow for reimbursement of income lost and payment of fixed and continuing expenses. However, business interruption claims are still governed by the general maxim of insurance law: Recovery of insurance proceeds is not intended to place the insured in a better position than it would have been without the loss. Nevertheless, many policyholders are turning to their insurance companies to reimburse them in ways never contemplated by the parties or their insurance contracts. A prime example is the unwarranted attempts to expand the parameters of business interruption coverage in the wake of 9/11.
Recently, two NY courts have specifically rejected policyholders' arguments that the scope of their business interruption coverage should be stretched beyond the plain meaning of its terms and conditions. See Streamline Capital LLC. v. Hartford Casualty Ins. Co., No. 02 Civ. 8123, 2003 WL 22004888 (S.D.N.Y. Aug. 25, 2003); Zurich American Ins. Co. v. ABM Industries, Inc., 265 F.Supp.2d 302 (S.D.N.Y. May 29, 2003). While both decisions are from the U.S. District Court for the Southern District of New York, their holdings have national implications for insurance practitioners. This article will discuss these two decisions and their impact on business interruption claims arising from 9/11.
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Bit Parts
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Risks of “Baseball Arbitration” in Resolving Real Estate Disputes
“Baseball arbitration” refers to the process used in Major League Baseball in which if an eligible player's representative and the club ownership cannot reach a compensation agreement through negotiation, each party enters a final submission and during a formal hearing each side — player and management — presents its case and then the designated panel of arbitrators chooses one of the salary bids with no other result being allowed. This method has become increasingly popular even beyond the sport of baseball.
Disconnect Between In-House and Outside Counsel
'Disconnect Between In-House and Outside Counsel is a continuation of the discussion of client expectations and the disconnect that often occurs. And although the outside attorneys should be pursuing how inside-counsel actually think, inside counsel should make an effort to impart this information without waiting to be asked.