Business Interruption to Drive Storm Insurance Claims

Fitch Ratings argues such claims will be higher than estimated.

Hurricane Sandy’s cost to insurers will be fueled by higher-than-estimated claims from clients who purchased protection to guard against business interruption, Fitch Ratings said.

The storm left more than 8 million customers without power, shutting airports and New York’s subway system, and disrupting business at retail, manufacturing and energy firms. Business-interruption coverage reimburses companies that suspend operations after property damage, while contingent BI policies offer protection if a supplier’s operations are hobbled.

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