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Quote of the Day - I always tried to turn every disaster into an opportunity. - John D. Rockafeller
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The Disasters Of Business Interruption Insurance Coverage

When the lights went out, so did the assembly line. Fourteen of Chrysler's plants went down in late 2003, idling workers for a day, stopping 10,000 vehicles in production and wasting nearly 1,000.

The blackout of 2003 has now made its way into court in a big way. $33 million in damages, plus another $4 in interest.

Chrysler is suing it's insurer, Allianz AG, for failure to cover its business interruption. Allianz has some marketing materials about its business interruption insurance coverage.

According to the AP, "The blackout was the worst in the nation's history, knocking out power to parts of eight states and costing at least $6 billion in economic and other losses."

Business interruption insurance coverage is designed to pay in the event that a business is unable to operate as a consequence of a covered loss. In this instance, the assembly lines of GM and Ford went down in addition to Chrysler's. GM didn't file an insurance claim. Perhaps GM's assembly line is set up to deal with a blackout. Ford wouldn't say whether it submitted a claim or not, but it didn't file suit. If Ford had coverage, then it would appear that its insurance company paid.

Is business interruption coverage a good idea? Depends on whether your company can financially handle the downtime. With tsunamis, blackouts, earthquakes, mudslides, hurricanes and other natural disasters, now would seem a good time to revisit your insurance coverage.

Then the only other natural disaster you may have to deal with is your insurance company.

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Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Wednesday, January 12, 2005 at 23:25 Comments Closed (0) |
 
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