New York Hurricane Sandy Business Interruption Attorney

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Hurricane Sandy caused an estimated $65 billion in damage, with the northeastern U.S. hit hardest by the storm. In New York, financial loss resulted not just from damage to property, but also from interruption to normal business operations in the state.

While most business owners and owners of commercial property have business interruption insurance coverage to transfer the risk of financial loss to an insurance carrier, many businesses are still facing challenges obtaining payments from insurers. Policyholders whose insurance companies have refused to provide full payment for business interruption claims should speak with a New York Hurricane Sandy business interruption attorney at Doyle LLP.

Legitimate Business Interruption Claims Must Be Fully Paid

Insurance companies must pay business interruption claims in full and in a timely manner in order to ensure that a business is able to survive when its operations are suspended by a storm and/or by damage to operating locations or equipment. The amount that an insurer must pay is dictated by policy limits and covered losses suffered by the insured, and a failure on the part of an insurance company to pay claims in full can result in significant financial hardship.

Although New York businesses specifically purchase business interruption insurance to transfer the risk of financial loss and to protect themselves from catastrophic financial harm, many insurance companies after Hurricane Sandy have refused to provide the financial protection that business owners paid for. Insurance companies responding to business interruption claims have:

  • Denied legitimate claims
  • Significantly undervalued the losses caused by the interruption of business
  • Imposed unreasonable and burdensome delays or requirements on insured policyholders seeking to make covered claims

Insurers who engage in these behaviors or who otherwise fail to pay their policyholders may be acting in violation of express and implied terms in insurance contracts. A New York Hurricane Sandy business interruption lawyer can assist covered business owners in determining if the insurance company has failed to fulfill its legal obligations.

Legal Action Can Be Taken Against Insurance Companies

Insurance policies are contracts, and a refusal to pay covered claims is a breach of contract that can give rise to a cause of action. An insured policyholder whose insurance company has been unreasonable in its handling of a business interruption insurance claim may file a civil lawsuit against the insurer.

Traditionally, breach-of-contract laws would limit insured policyholders to recovering only the amount of money the insurer should have paid for covered losses caused by interruption of the business. However, insurance contracts are treated differently from other types of standard contracts. With every contract of insurance, there is an implied covenant of good faith and fair dealing requiring insurance carriers to be reasonable and fair in processing and paying claims.

If an insurer denies a claim, delays payments or refuses to pay as required without reasonable justification, the policyholder can file a tort lawsuit for a violation of the implied covenant of good faith and fair dealing. The tort lawsuit allows the insured policyholder to obtain payment from the insurer not just for covered losses but also for any additional monetary damages resulting from the failure of the insurer to pay. When an insurer has refused to pay a legitimate business interruption insurance claim, the policyholder may also be able to recover payment of attorneys’ fees, compensation for emotional distress, and punitive damages in limited cases where the insurer has engaged in fraud or acted with malice.

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A New York Hurricane Sandy business interruption attorney at Doyle LLP can assist business owners in filing a bad faith claim. Our attorneys can represent you in court to obtain damages for bad faith.

To learn more about how Doyle LLP can assist with your case, contact us today at (888) 571-1001.