BI losses after Hurricanes Harvey and Irma may account for the largest share of the insured losses

21 September 2017 — Daniela GHETU
Business Interruption (BI) losses after the Harvey and Irma hurricanes may exceed the actual property damage, experts said, rivaling in this respect the Hurricane Katrina's outcome.

The extreme storms have triggered extended flooding and power outages, damaged infrastructure and disrupted many industries, affecting the supply chain or preventing employees from reaching their workplace.

Small business seem to suffer the most, as PwC U.S. insurance practice leader Greg Galeaz told Best's News Service: "Companies are suffering and small commercial insurers are busy. Dozens of small businesses inhabit ubiquitous shopping plazas, all dependent on electricity." He gave in example the restaurants which can't open if there's a boil-water advisory. AT the same, as Galeaz explained, Florida's stricter building codes mitigated, except for few situations, the extent of physical damage insured losses from Irma. Looking at the two storms, he said more businesses interruption claims are likely in Florida, versus more costly claims in Texas.

In Texas, petroleum and coal products manufacturing, chemical manufacturing and the and oil and gas extraction sector were significantly affected, potentially disrupting an entire chain of production as there industries are forming the very base of the supply chain.

The share of industry insured losses borne by business interruption in the wake of Harvey and Irma should be the same or greater than after Katrina, said AmWINS executive vice president and national property practice leader Harry TUCKER, quoted by Best's News Service.

Yet, a clear picture on the extent of losses will be available only closer to the end of 2017, or in the first quarter of 2016.

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