An unprecedented blackout of half of India that left morethan 610 million people—almost a tenth of the world'spopulation—without power has exposed the shockingly poor electricalgrid in the world's second-largest nation. It also exposed theinadequate insurance coverage most global companies have for suchpotentially disastrous events.

“In general, U.S. firms operating abroad are not well-coveredfor power-outage-related service interruptions,” says JeffPhillips, a partner at risk management, forensic accounting andloss advisory firm Dempsey Partners. Most companies, he says, don'teven know what kind of coverage they have paid for.

“I can tell you that since 2001, with almost every single claimI've been involved in, there's been some surprise to the policyholder—some coverage limit they didn't know about, some exclusionthey didn't anticipate, some deductible amount that was larger thanthey had expected,” says Phillips, pictured at right. “There'salmost always some surprise. Insurance contracts are the only casewhere managers will pay millions for a contract they don't even seefor months, and that they often don't read when they finally getit.”

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