The winter storm that plunged much of the United States into a deep freeze this week will likely bring about insurance claims challenges related to cause of loss and business interruptions. Disputes could arise from insurance provisions that can preclude coverage when a noncovered cause of loss contributes to damage that initially resulted from a covered cause of loss.
Bracewel’s Carlton D. Wilde III told Law360 he expected anticoncurrent causation clauses in insurance policies to pose some of the trickiest issues going forward, while also spurring a lot of litigation. He posed the hypothetical of a business being denied coverage for a wind- and snow-damaged roof because later snowmelt outside the property caused uncovered water damage.
“A carrier’s probably just going to come in and just say, ‘No – this is flood, the whole thing’s excluded,’” Wilde said. “So that’s when it gets really important to make sure, we’ve got the right documentation, try to separate those out.”
