Key Insurance Coverage Considerations in the Wake of Superstorm Sandy

Superstorm Sandy ' a post-tropical storm with Category 1 hurricane strength ' struck the United States with a liquid fist on Oct. 29. Sandy devastated the U.S. Mid-Atlantic region and affected at least 24 states with gale-force winds and heavy rains that reached far inland causing flooding, and blizzard conditions in West Virginia. The storm, which was the confluence of an Atlantic Ocean hurricane with two winter weather systems, hit shore five miles southwest of Atlantic City, NJ, with a record storm surge. Although the center of the storm missed New York City, its storm surge flooded streets, tunnels and subway lines in Lower Manhattan, Staten Island, Coney Island, and other areas of the city. The storm caused severe and widespread destruction of property in New York, New Jersey and other states, and left millions without power or transportation in its wake. Even before Sandy made landfall, the storm caused major disruptions as a result of preparedness actions taken across the East Coast, including mandatory evacuations, suspension of mass transit systems, flight cancellations, and closures of airports, businesses and entertainment venues ' even the New York Stock Exchange. There is no doubt that picking up the pieces in Sandy's wake will be challenging. Although the full extent of damage and business disruption will not be assessed in concrete dollar terms for many months, early estimates predict that Sandy has caused at least $20 billion in insured losses in addition to economic/business interruption losses in excess of $50 billion, which would rank Sandy as the fourth-costliest catastrophe in the United States. See Eqecat sees Sandy insured losses up to $20 billion in U.S., Reuters (Nov. 2, 2012).