January 16, 2025 • 33 mins
The horrific wildfires unleashing carnage in Southern California underscore the need for reliable insurance protection both for businesses and homeowners.
As of Jan. 16, 2025, these wildfires have scorched more than 60 square miles, claimed at least 25 lives, and left 26 people missing. With more than 12,000 structures destroyed and tens of thousands displaced, the economic impact is estimated between $135 billion and $150 billion.
On a new episode of the Emerging Litigation Podcast, we discuss the types of damages and losses typically covered under homeowner and commercial property insurance policies, policy limitations, navigating the claims process, and business interruption coverage. We also discuss a Jan. 10, 2025, ruling out of the Northern District of California in Bottega v. National Surety which held in a business interruption case that whether smoke damage caused the suspension of operations at the policyholders’ businesses is a genuine issue of fact.
My guests are all from the long-time insurance recovery law firm of Anderson Kill. Dennis Artese is a shareholder in the New York office and is chair of the firm’s Climate Change and Disaster Recovery practice group. Marshall Gilinsky is a shareholder the firm’s Boston office and practices in the firm’s Insurance Recovery and Commercial Litigation groups, as well as its Restaurant, Retail & Hospitality Group. Joshua Gold is a shareholder in the New York office. He chairs the Cyber Insurance Recovery Group and co-chairs the Marine Cargo Insurance Group. He also handles directors and officers insurance and business income/property insurance matters.
If you have comments or wish to participate in one our projects please drop me a note at Editor@LitigationConferences.com.
Tom Hagy
Litigation Enthusiast and
Host of the Emerging Litigation Podcast
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:03):
Welcome to the Emerging Litigation Podcast.
I'm Tom Hagee, longtimelitigation enthusiast, editor,
publisher and now podcaster.
I'm founder of HB Litigation,which is now part of Critical
Legal Content, a business Ifounded in 2012 to serve as a
content marketing department forlaw firms and litigation
(00:24):
service providers.
And now here's today's episode.
If you like what you hear,please give us a rating.
If you want to reach me, pleasecheck out my contact
information in the show notes.
Well, in this episode, which wewanted to get out quickly, we
wanted to talk about theinsurance coverage aspects of
the devastating wildfires stillburning in the Los Angeles area,
(00:45):
currently one of the mostdevastating wildfire seasons in
recent history.
As of this moment, which istoday's January 16th, these
wildfires have burned more than60 square miles, claimed at
least 25 lives and just as manypeople are missing.
At least 12,000 structures havebeen destroyed.
Tens of thousands of peoplehave been displaced.
(01:05):
They're already putting theeconomic impact of the fires at
between $135 billion and $150billion.
Our hearts go out to all themany people in Southern
California.
Today, I did want to getsomething out quickly to talk
about insurance aspects both forhomeowners and commercial
policyholders, and with me to dothat are three folks from
(01:30):
Anderson Kill, which is awell-known insurance recovery
firm.
They've been around forever.
Gene Anderson was the founderand with me are Dennis Ortiz.
He's a shareholder at thefirm's New York office.
He's chair of their climatechange and disaster recovery
practice.
With him is Marshall Galinsky.
(01:50):
He's also a shareholder.
He's located in their Bostonoffice and he practices also in
the insurance recovery andcommercial litigation groups.
He's also a member of thefirm's restaurant, retail and
hospitality group, which isrelevant in this context, as
you'll see.
And finally, josh Gold is ashareholder also in the firm's
(02:12):
New York office and he's chairof the firm's cyber insurance
recovery group and co-chair ofthe marine cargo insurance group
.
But he's also handled coveragein the areas of directors and
officers insurance, businessincome and property insurance.
We're going to talk about givingyou kind of an overview of the
scope of coverage, analyze someof the limitations there might
be, importantly, how to navigatethe claims process and preserve
(02:35):
insurance rights, and then diveinto business interruption.
So with that, here are DennisOrtiz, marshall Galinsky and
Joshua Gold of Anderson Kill.
I hope you enjoy it and, as Isaid, so let's just jump right
into it.
If we could kind of set thestage with some general
discussion about the types ofdamages and losses that are
typically covered under policies.
(02:58):
We can talk about homeowner andcommercial property policies in
the context of wildfires, sowho can kick us off to
understand the scope of coverageinvolved here?
Speaker 2 (03:09):
Either Marshall or Josh.
Do you want to take thecommercial?
I can take the homeowner partof it if you'd like.
Speaker 3 (03:16):
Sure.
So from a commercialperspective, there's two main
components to what's covered.
One is the damage to theproperty that's physically
damaged itself.
The other is businessinterruption losses that result
in the wake of physical damage,and that business interruption
loss is not limited tocircumstances where the business
(03:41):
owner's own property is damaged.
The business owner's ownproperty is damaged, but it also
kicks in in situations wherethere's losses to suppliers or
customers that affect theproductivity of the business
itself.
And then, of course and we'lltalk about this I'm sure there's
(04:08):
the question of whetherinterruptions to business that
are a result of smoke-relatedissues constitute physical loss
or damage that triggers coverage.
The answer to that is yes, andthat's a really important topic
that I'm sure we'll delve into alittle more deeply.
Speaker 1 (04:15):
Yeah, we'll get to that one too.
Speaker 2 (04:20):
Yeah, just further to the commercial losses,
marshall's right.
The two main components arebuilding and business
interruption.
You also have your businesspersonal property.
That's going to be covered andthere'll be damage to your
business personal property andthere'll literally be dozens of
additional coverages that youhave to look at very closely.
Building in ordinance or law inordinance excuse me coverage
(04:43):
that's going to be important ina lot of these cases where your
building is built, you know, acertain amount of years ago,
it's not up to code, the extentof the damage is significant
enough where you're going tohave to substantially rebuild
that building.
Now there's going to be all newsorts of codes in place and
you're going to need coverage tocomply with those increased
costs of building because of thecode requirements, things like
(05:06):
debris removal, the list goes onand on.
But you really have to do acareful review of the literally
dozens of additional coveragesthat may be available to you for
these losses.
You know the homeowner side it'ssimilar, right.
You have your dwelling coverage.
There may be a separate limitstated for other structures,
things like detached garagesheds, other structures that are
(05:29):
on your property.
You'll have your personalproperty coverage just like you
would in a commercial contextand the sort of homeowner
equivalent of businessinterruption could be thought of
as loss of use or additionalliving expense.
And that will probably be themost important coverage
immediately for homeowners whohave lost their homes in this
(05:51):
terrible tragedy.
That's going to pay, you know,essentially to maintain your
standard of living while yourhome is being rebuilt.
So it'll pay for your food andyour shelter.
Ideally you would get you knowthey would get you a rental, a
comparable rental.
That's going to be verydifficult to find at this point.
In the most near term you wantto get into a hotel.
(06:13):
Probably, if you can't livewith family, get into a hotel.
Maintain your receipts, anykind of food expenses that you
incur because you couldn't cookat home.
Make sure you're keeping closetrack of that and submit those
to your insurance company.
And you know, if you are livingwith family, it's probably a
good idea to enter into a leasewith them so that you have some
(06:35):
documentation as to costsincurred for that expense that
should be covered.
Speaker 1 (06:42):
Gotcha.
Okay, you know I was chattingon a completely separate issue
and you know there are peoplewho actually, who have lost
their lives in this and theestate lawyer I was talking to
said, you know, she started kindof like, well, what would I
want to happen?
And she, just, in that area oflaw, she said it'd be important
to have your life insurance gointo a trust so your family
(07:08):
won't be delayed in gettingfunds like that.
But that's just a side notethat I throw in there after
happening to just be speakingwith an estate lawyer about that
.
So next, so what aboutlimitations?
What kind of limitations mightpeople expect that would affect
their coverage?
Speaker 4 (07:29):
So I guess certainly on the home side, homeowners may
be looking at sublimits forcertain types of property
electronics, jewelry, fine arts,any kind of special or
customized furnishings,furniture and the like.
So they should be aware of that.
(07:50):
It's worth noting that, youknow, for both businesses and
for individuals, they may nothave at this time of crisis,
their insurance documents handy.
Time of crisis, their insurancedocuments handy.
It may be due to the fact thatthey went up in flames.
(08:11):
It may be that they've beendisplaced by civil authorities
so they can't enter theirpremises, even if their premises
are still standing.
And another issue, of course,may be that they may have just
renewed their coverage and notreceived their new insurance
documents.
At Anderson Kill we've seensituations where policyholders
(08:32):
aren't given their full formaldocumentation weeks, months,
sometimes years after bindingcoverage.
So it's a long way of sayingthat policyholders will want to
get their insurancedocumentation as soon as they
can.
If they don't have it handy,they can certainly request the
(08:54):
insurance agent, an insurancebroker or even the insurance
company itself to furnish thatdocumentation.
That should give you a goodhandle, certainly on what
sublimitations may be imposedinto the policy.
But it's certainly a good thingto look at and just to really
echo the points that Dennis andMarshall made about looking at
(09:18):
the coverages they have.
One thing to remember in all ofthis is not to make any
categorical assumptions aboutwhat is covered, what is not
covered.
There's a lot of variation onthe property insurance side,
even more so, I would argue, inthe commercial space and you get
(09:46):
your insurance on a broker form.
There are likely to be far morebells and whistles and very
broad grants of coverage,whether it's on the PD side or
it involves time elementcoverage like business
interruption, and even in theindividual homeowner space
there's some insurance companiesthat tout that they sell to
high worth individuals andtherefore sell a more robust
(10:09):
package of policies.
But again, try not to assumeanything.
Take a look at what thepolicies provide and try and
obviously get as much coverageas you can as quickly as you can
.
Speaker 2 (10:22):
And in terms of limits, I think you know the
commercial sense when yourpolicy will have a dollar value
limit for your building coverageand in most policies commercial
policies that's the limit.
I have seen some with somemargin clauses or escalation
clauses where if you, you know,inadvertently understate the
(10:43):
cost that it would require youto replace the building, they
will allow some type of marginor a cushion on top of that
limit, maybe 25%.
So you have to read the policyIn the homeowner context.
You see more of that and itdepends on what type of coverage
you purchase On the buildingside or the dwelling side.
You can have just actual cashvalue, where you're going to get
(11:07):
paid just a depreciated valueof the building at the time of
the loss.
You don't actually even get thereplacement cost coverage.
If you have replacement costcoverage they'll pay what it
costs to replace, but only up tothe stated limit.
You may have enhancedreplacement cost coverage that
allows you some cushion on topof the limit that's stated.
Again, it could be 25 percent,it could be a dollar amount.
(11:29):
So you have to look at thatvery closely.
Some policies you may even havea guaranteed replacement cost
coverage.
So if your homeowner's policysays you have a limit, a
dwelling limit of one milliondollars, but you have an
endorsement for guaranteedreplacement cost coverage.
Now you could just throw outthe $1 million.
If the costs actually exceed $1million to replace it, then
that's what you get.
Speaker 1 (11:56):
So you know you have to look at the coverages very
carefully and the limits thatare stated there.
Okay, and Josh, you mentionedyou know about documents and
things going up in flames.
I guess increasingly people areprobably putting more and more
on the clouds not everybody, butso they could access things
later.
I would think you know I'm aguy who can't find his wallet
half the time, so trying to finddocuments like that, I know a
(12:16):
lot of our documents because mywife has actually organized our
up on SharePoint or Google Driveor somewhere.
See, I don't even know wherethey are exactly up on
SharePoint or Google Drive orsomewhere.
See, I don't even know wherethey are exactly.
So jump next into hold on asecond Wanted to talk next about
.
You know these are verypractical and important aspects
(12:37):
of navigating the claims process, you know for effectively
managing and negotiating theseclaims related to fire damage,
including documentation, as Ijust mentioned, dispute
resolution and communication andpreserving your insurance
rights.
So who can kick off thediscussion about the claims
process?
Speaker 2 (12:56):
I'm happy to do it, unless one of you guys want to
talk.
No, marshall, we'll hear fromyou on the smoke BI.
Speaker 1 (13:04):
You don't want me doing it.
Speaker 2 (13:05):
Yeah.
So the most important thing,first and foremost, is to
provide notice.
Right, it seems obvious enough,but all property policies
typically require prompt noticeof the loss.
So make sure you're reportingthat to your insurance companies
.
You could do that through yourinsurance broker.
Just explain that you have aloss and that you need to report
it to all potentiallyapplicable insurance companies.
(13:28):
The next thing you need to dois they'll assign a claims
adjuster.
You know this is a tragedy,obviously of epic proportions.
This is a tragedy obviously ofepic proportions.
Insurance companies are goingto be spread thinly.
Their representatives will bespread thinly.
(13:51):
The adjuster you have today maynot be the adjuster you have
three weeks from now.
It's going to be a trying anddifficult process.
So make sure you have as muchof your communication in writing
as humanly possible, as much ofyour communication in writing
as humanly possible.
You should be documentingeverything that is occurring and
everything that is notoccurring on the loss.
Right, you should demand andexpect responsiveness from your
(14:12):
insurance company.
The fact that there are, youknow, hundreds of thousands of
people that have been affectedby this is no excuse.
They have obligations to adjustclaims promptly and fairly and
you need to hold them to that,and the way you do that is
document everything in writing.
Again, everything is happeningand not happening.
In the coming weeks you willneed to be documenting your loss
(14:33):
right.
So that might include and Iwould strongly urge you to
consider hiring a reputablepublic adjuster to serve as your
advocate.
That is someone who willprepare the claim on your behalf
, present it to the insurancecompany and fight for you.
The insurance company will hirewhat they call an independent
adjuster.
(14:53):
In my experience they'reanything but independent.
They work for the insurancecompany.
They're beholden to theinsurance company.
So you want representation onyour side, or at least it's
something you should stronglyconsider.
Public adjuster can help youput together the dwelling claim
or, in the commercial sense, thebuilding claim, the personal
(15:13):
property claim, the businessinterruption.
They will facilitate all ofthat and it's something to take
it off of your shoulders andhave a trained professional who
knows the policy and knows thedifferent coverages available to
you to put together that claim.
(15:41):
But pay very close attention toyour policy language as to when
a proof of loss is required tobe filed.
Sometimes it could be 30 or 60days from the loss and it's very
important that if you're notgoing to meet that deadline.
At a minimum you get anextension in writing agreed to
by the insurance companyrepresentative, or you file a
partial proof of loss 30, 60days.
You likely will not know theextent of your loss, so you want
(16:04):
to put in a partial proof ofloss to omit that requirement
and make very clear in therethat other additional amounts
are to be determined and thatit's without prejudice of your
right of recovery for additionalamounts under the policy.
For additional amounts underthe policy Other things to be
(16:25):
aware of.
Sometimes there is a deadline bywhich you must give notice of
your intent to rebuild.
That might be six months fromthe loss.
There may be a deadline bywhich you need to actually
replace your damaged property.
That could be 18 months or twoyears.
Read your policy very closely,because it varies, and make sure
you're complying with that.
(16:45):
Again, to the extent extensionsare needed, make sure you're
getting them in writing.
One of the most importantdeadlines you need to concern
yourself with is any suitlimitation in the policy.
That is basically a contractuallimitations period in which you
have to sue the insurancecompany.
(17:05):
You know general statutelimitations maybe three years,
six years.
These are much, much shorterand they're by contract, and
some of them say you need to suewithin a year of the loss.
I think California has astatute that extends it to two
years, but you want to checkthat.
To be in the context of firelosses like these.
I believe it's extended to twoyears under California law, but
(17:30):
you want to be very careful tomake sure you're complying with
that.
Otherwise, document your loss asfully and as thoroughly as
possible.
Don't wait for the insurancecompany to prepare their
estimates and tell you what theythink it's worth.
Do what you need to do to getthe building loss value, the
business interruption loss value, present it to them, and if you
(17:53):
can't get agreement, you shouldconsider filing what we call a
hostile proof of loss, where youdon't necessarily have an
agreement with the insurancecompany on the amount of loss
yet, but in order to get them toaccept or deny or take some
other action with respect toyour loss, you have to file that
proof of loss.
At that point they then haveeither 30 or 60 days to respond
(18:16):
to it, and should they reject it, then you need to know you need
to take the next step, andthose next steps could be some
sort of alternative disputeresolution.
Maybe it's mediation, maybeit's an appraisal process to get
valuation issues worked out, orit could be litigation.
Speaker 1 (18:36):
Yeah, from a human and practical standpoint, if I
could pause for a second.
I mean, just, you know, afriend sent me a photo of her
house.
I mean she literally waswatching it burn during the day
and then the later ones werejust embers at night.
And you know, she's got afull-time job, she's an attorney
working in-house at a bigcompany and she's got children,
(19:03):
got children and then just likesuddenly having this new project
to take all the things you'resaying, I mean, if you think
about all the things you'resupposed to be doing in life,
suddenly you listed just a wholebunch of things that somebody's
in charge of and I guess Idon't know how a person does it,
how an individual navigates itAt a company I'm assuming it
would be like a risk manager orsomeone you know who's.
This is what they're built todo.
Is that that accurate?
Speaker 2 (19:24):
Yeah, Risk management or misradiator, CFO, general
counsel typically.
Speaker 1 (19:30):
Yeah, yeah, yeah, and it's just the business
interruption part of it isinteresting.
I mean, there was supposed tobe a big hearing in a in a
antitrust case by Elon Muskagainst OpenAI and Microsoft.
It was this week.
Musk's attorneys lost theiroffices in the Palisades fire
and so that's been postponed.
(19:51):
So just like a busy lawpractice, like many busy
practices.
I just I don't know.
I don't have a question otherthan like how do you get through
it?
Speaker 2 (20:01):
Yeah, and you know.
On that point, tom, you thinkabout the?
Homeowners that lost all theirpossessions.
Speaker 1 (20:08):
Right.
Speaker 2 (20:08):
And what a difficult process that will be for them to
go in and itemize all of theirpersonal property losses.
Speaker 3 (20:16):
Right.
Speaker 2 (20:16):
Just incredibly trying and difficult process,
and some of it will be by memory.
Some of it will be by memory,some of it will be by.
You know, to the extent youhave video or photographs to try
to piece all that back together.
But there's just this hugeemotional component to it that
you know should be considered aswell and again, to the extent
you can get some assistance tohelp you through that, it
(20:40):
probably makes good sense to dothat.
Speaker 3 (20:42):
Yeah, and to answer your question how do you get
through it?
I mean, don't underestimate thepower of human fortitude, right
?
I mean, I've talked to peoplethere and, for the most part,
the people I talk to aredetermined people.
They know what's happening tothemselves, to their families,
to their businesses, and they'relaser focused.
(21:03):
The people I've spoken to knowexactly what they need to get
done and they're determined toget it done.
And trust me, I can speak, Ithink, confidently, for Josh and
for Dennis when I say thatdetermination is essential when
you're processing these claimsand working with insurance
companies.
What Dennis said before, I meanall of his advice about
(21:25):
documenting everything and justI want to emphasize one thing he
said, because the adjuster thatcame out to your plate, your
business or your house this weekmay not be the adjuster that's
coming out three weeks from now.
If you've documented everything, you don't have to get jerked
around by someone saying, ohsorry, I'm new to this, I don't
know what's going on.
You drop that file on them andyou say, well, welcome to the
(21:48):
file, here's everything that'shappened.
We're moving to the next step.
That's the determination thatit takes, and I believe that the
people in Southern Californiahave exactly what it takes to
get it done.
Speaker 4 (22:07):
Sure and Tom, since insurance is supposed to be that
lifeline that allows you torecover financially, you know,
rebuild your shelter, all ofthose things your business.
I know people during this kindof heartbreaking time of crisis
are understandably distracted,distraught and every other
emotion you can think of.
But dealing with the insurancebureaucracy is part of the job.
(22:32):
People have that determinationor they don't.
They have to go through thisprocess because the insurance
claims process can be veryunforgiving for people who miss
deadlines, even during somethingas catastrophic as this.
(22:53):
So we have seen so many courtsuphold the fine print, deny
coverage on the technicality.
So to the extent policyholderscan position themselves, even if
it is like finding another hourin the day that they don't have
.
It's so essential to do just toavoid calamity down the road.
Speaker 1 (23:19):
To add insult to injury, just to avoid calamity
down the road.
To add insult to injury, OkayWell, thank you for that
interruption, but I couldn'thelp but think about that as you
were talking.
So why don't we move next tomore about business interruption
?
Marshall, you mentioned itearlier business interruption
and smoke damage and things likethat.
(23:40):
So what can you tell us aboutthose kinds of claims?
Speaker 3 (23:44):
Yeah, so there's a history, a precedent that goes
back for a while.
I just got to frame this.
In order to trigger propertyinsurance coverage, you need to
have direct physical loss ordamage to property, either your
property or property someoneelse's property away from you,
if they're a supplier or acustomer.
(24:04):
The question arises when itcomes to smoke.
Well, is smoke and soot and ashdamage to your property that
triggers coverage?
The answer to that is yes.
You know a well-known case from2016 in Oregon held that
(24:26):
wildfire smoke that disruptedperformances at a theater for a
Shakespeare festival wasphysical loss or damage that
triggered coverage for thebusiness interruption that
resulted from those nearbywildfires.
The theater did not catch onfire, but when the winds were
blowing toward the theater, itwas too smoky to have
performances and the court heldin that case it's called Oregon
Shakespeare.
(24:47):
The court held that that is acovered business interruption
loss.
We saw during and the wake ofthe COVID pandemic that
insurance companies responded tothe pandemic by saying that
COVID doesn't cause therequisite physical loss or
damage to property and by andlarge, they were successful in
(25:08):
pressing that argument,including in the Supreme Court
of California.
But it's notable that theSupreme Court in California, in
deciding that case, looked tothis precedent of cases like
smoke, which has been held tocause physical loss or damage,
and they said COVID is differentfrom smoke, right Again
confirming that damage caused bysmoke is covered.
(25:30):
But the Supreme Court ofCalifornia held that damage
caused by COVID is not covered,right.
Fast forward to these wildfiresand the terrible disruptions
that smoke has caused to so manybusinesses in the area of those
fires.
Those losses continue to becovered and, ironically,
coincidentally, this Friday,this past Friday a federal
(25:55):
district court judge in SanFrancisco issued a ruling a
summary judgment ruling on acase that involved wildfire
smoke damage from some 2017wildfires in Napa.
(26:21):
What the court said in that casewas that, yes, smoke does cause
the direct physical loss ordamage required to trigger
business interruption coverageunder a standard property policy
.
And, interestingly, the courteven cited to the California
Supreme Court's decision in theCOVID case to make the point
that I just made a second agothat if smoke was covered before
and COVID is different, thensmoke continues to be different
from COVID and it does triggercoverage.
The timing couldn't be betterfor businesses in Southern
(26:42):
California to show theirinsurance companies and to
convince their insurancecompanies that the losses that
I'm suffering now because ofsmoke-related interruptions is
something that's covered undermy policies, and anyone who's
being told by an insurancecompany adjuster or someone that
they're hearing on TV speakingfor the insurance industry that
(27:04):
smoke doesn't cause physicalloss or damage should ignore
that feedback.
That's wrong and the judge inCalifornia said on Friday that's
wrong.
Speaker 1 (27:13):
Okay, I assume you're writing something about this.
It's so.
Speaker 3 (27:18):
it's funny because I wrote something about smoke
related indirect losses lastWednesday or so and we put that
out and just like clockwork, thejudge's order came down on
Friday, basically completelyvalidating what I had said in
the article that went out.
Speaker 1 (27:36):
OK, we'll put a link to what was the name of the case
.
Speaker 3 (27:39):
It's called Bottega versus Chicago it.
It came out of the NorthernDistrict of California January
10th 2025.
Speaker 1 (27:53):
OK, all right, I'll grab on, go ahead.
Speaker 2 (27:56):
Yeah, our partner, who, you know, is also doing an
article on this very subject aswell.
All right About a week or so.
Speaker 1 (28:03):
Okay, good, we'll look for that.
Was there anything else youwanted to say about business
interruption?
There were some other otherpoints that have come up before.
I know I remember from theCOVID issues around contingent
business interruptions, civilauthority things like that.
Speaker 4 (28:20):
Yeah, I was just going to say, and then, dennis,
please feel free to follow up onit.
Um, I think that again thisharkens back to the issue of
looking at your policies,knowing that not all policies
provide the same insuringagreements.
So do take a look and see howyour policies provide for time
(28:45):
element losses.
You know, business interruption, aka business income coverage,
is typically one variety ofcoverage and probably the main
one that has usually the largestlimit of coverage attached to
it.
But there are other timeelement coverages out there and
you know, along the lines ofwhat you just mentioned, civil
(29:06):
authority coverage is destinedto be rather relevant to what
has transpired in Los AngelesCounty.
Certainly there are othercoverages like ingress-egress
coverage, contingent businessinterruption coverage where you
yourself have not had propertydamage but property of someone
(29:29):
in the commercial stream ofcommerce who you're dependent or
relying upon may have.
So there are lots of differentcoverages to take a look at.
Service interruption coverageis another.
So multiple coverages may applyto a business claim and
(29:49):
certainly it's worth coming upto speed on what coverages
you've purchased and what thelimits are.
Some of these more exotic timeelement coverages may have a
sublimit and I believe almostall of the time.
Element coverages usually havea deductible of some variety,
(30:10):
usually expressed in hours, butagain that can vary policyholder
to policyholder.
Speaker 3 (30:19):
Okay, real good.
One other thing just worthmentioning and this is kind of
an interesting take on it butattraction property coverage.
Attraction property coverage isdesigned to compensate a
policyholder whose businessbasically depends on other
properties to attract businessto their location.
So I'm thinking abouthospitality businesses in this
(30:42):
environment.
Basically, Los Angeles is onfire and if you have a hotel in
the San Fernando Valley andyou've got basically fires on
one side of you and fires on theother side of you, that's
damage to basically whatattracts people to your business
, that is, your community is onfire.
(31:05):
You've never really seenanything quite like that.
I had a case once for somehospitality companies that lost
money because of landslidedamage on the Pacific Coast
Highway and, of course, peopledriving up and down the Pacific
Coast Highway Highway 1, is anattraction to that region of the
(31:25):
country, people that drive fromLA to San Diego, and that was
an interesting case.
So I think it's important forpeople to really look at their
policy carefully, as Josh andDennis said, think of all the
different extensions of coveragein there and ask themselves how
has my business been affectedin a way that triggers any of
(31:46):
these?
Speaker 2 (31:46):
coverages If your business itself did not actually
sustain physical loss or damage.
That does not mean that you'renot entitled to coverage.
You may not have suffered anydamage, but if you lose business
, if you lose revenue or profitbecause of damage in your
(32:08):
surrounding area, there may be acoverage under which you could
recoup those lost profits.
Speaker 1 (32:17):
Okay, good, that's all I had.
Speaker 3 (32:18):
I'm going to end it there, unless you guys had
anything else you wanted to addOkay, well, good, all I would
say, tom, and really from theheart and speaking on behalf of
all of us, it's hard to watchthe devastation that continues
to unfold in LA, but it'simportant to know that there is
a community, and I think peoplein LA know this.
It's important to know there'sa community across the country
(32:41):
that is watching and feeling andcaring about what's going on
and that we're here to help.
I think we've.
There's just been an outpouringof support in so many ways from
people around the country.
We are these insurance geekswho happen to know a whole lot
about how to move insuranceclaims forward, so we're happy
to help in that way.
But we're there on an emotionaland just support level also
(33:05):
because we watch thesecatastrophes all the time and
it's important for everyone toknow that there's people around
the country that are committedto helping Very good.
Speaker 1 (33:15):
Well, that's a good ending.
Thank you for that.
All right, thank you, guys forpulling this together so quickly
.
I want to get it out as fast aspossible, so I'll let you know.
Speaker 4 (33:22):
Thanks, tom, appreciate it.
Speaker 1 (33:24):
Thank you, guys.
That concludes this episode ofthe Emerging Litigation Podcast.
I'm Tom Hagee, your host, whichwould explain why I'm talking.
Please feel free to reach outto me if you have ideas for a
future episode, and don'thesitate to share this with
clients, colleagues, friends,and if you feel so moved, please
(33:44):
give us a rating.
Those always help.
Thank you for listening.
Welcome to the Emerging Litigation Podcast.
I'm Tom Hagee, longtimelitigation enthusiast, editor,
publisher and now podcaster.
I'm founder of HB Litigation,which is now part of Critical
Legal Content, a business Ifounded in 2012 to serve as a
content marketing department forlaw firms and litigation
(00:24):
service providers.
And now here's today's episode.
If you like what you hear,please give us a rating.
If you want to reach me, pleasecheck out my contact
information in the show notes.
Well, in this episode, which wewanted to get out quickly, we
wanted to talk about theinsurance coverage aspects of
the devastating wildfires stillburning in the Los Angeles area,
(00:45):
currently one of the mostdevastating wildfire seasons in
recent history.
As of this moment, which istoday's January 16th, these
wildfires have burned more than60 square miles, claimed at
least 25 lives and just as manypeople are missing.
At least 12,000 structures havebeen destroyed.
Tens of thousands of peoplehave been displaced.
(01:05):
They're already putting theeconomic impact of the fires at
between $135 billion and $150billion.
Our hearts go out to all themany people in Southern
California.
Today, I did want to getsomething out quickly to talk
about insurance aspects both forhomeowners and commercial
policyholders, and with me to dothat are three folks from
(01:30):
Anderson Kill, which is awell-known insurance recovery
firm.
They've been around forever.
Gene Anderson was the founderand with me are Dennis Ortiz.
He's a shareholder at thefirm's New York office.
He's chair of their climatechange and disaster recovery
practice.
With him is Marshall Galinsky.
(01:50):
He's also a shareholder.
He's located in their Bostonoffice and he practices also in
the insurance recovery andcommercial litigation groups.
He's also a member of thefirm's restaurant, retail and
hospitality group, which isrelevant in this context, as
you'll see.
And finally, josh Gold is ashareholder also in the firm's
(02:12):
New York office and he's chairof the firm's cyber insurance
recovery group and co-chair ofthe marine cargo insurance group
.
But he's also handled coveragein the areas of directors and
officers insurance, businessincome and property insurance.
We're going to talk about givingyou kind of an overview of the
scope of coverage, analyze someof the limitations there might
be, importantly, how to navigatethe claims process and preserve
(02:35):
insurance rights, and then diveinto business interruption.
So with that, here are DennisOrtiz, marshall Galinsky and
Joshua Gold of Anderson Kill.
I hope you enjoy it and, as Isaid, so let's just jump right
into it.
If we could kind of set thestage with some general
discussion about the types ofdamages and losses that are
typically covered under policies.
(02:58):
We can talk about homeowner andcommercial property policies in
the context of wildfires, sowho can kick us off to
understand the scope of coverageinvolved here?
Speaker 2 (03:09):
Either Marshall or Josh.
Do you want to take thecommercial?
I can take the homeowner partof it if you'd like.
Speaker 3 (03:16):
Sure.
So from a commercialperspective, there's two main
components to what's covered.
One is the damage to theproperty that's physically
damaged itself.
The other is businessinterruption losses that result
in the wake of physical damage,and that business interruption
loss is not limited tocircumstances where the business
(03:41):
owner's own property is damaged.
The business owner's ownproperty is damaged, but it also
kicks in in situations wherethere's losses to suppliers or
customers that affect theproductivity of the business
itself.
And then, of course and we'lltalk about this I'm sure there's
(04:08):
the question of whetherinterruptions to business that
are a result of smoke-relatedissues constitute physical loss
or damage that triggers coverage.
The answer to that is yes, andthat's a really important topic
that I'm sure we'll delve into alittle more deeply.
Speaker 1 (04:15):
Yeah, we'll get to that one too.
Speaker 2 (04:20):
Yeah, just further to the commercial losses,
marshall's right.
The two main components arebuilding and business
interruption.
You also have your businesspersonal property.
That's going to be covered andthere'll be damage to your
business personal property andthere'll literally be dozens of
additional coverages that youhave to look at very closely.
Building in ordinance or law inordinance excuse me coverage
(04:43):
that's going to be important ina lot of these cases where your
building is built, you know, acertain amount of years ago,
it's not up to code, the extentof the damage is significant
enough where you're going tohave to substantially rebuild
that building.
Now there's going to be all newsorts of codes in place and
you're going to need coverage tocomply with those increased
costs of building because of thecode requirements, things like
(05:06):
debris removal, the list goes onand on.
But you really have to do acareful review of the literally
dozens of additional coveragesthat may be available to you for
these losses.
You know the homeowner side it'ssimilar, right.
You have your dwelling coverage.
There may be a separate limitstated for other structures,
things like detached garagesheds, other structures that are
(05:29):
on your property.
You'll have your personalproperty coverage just like you
would in a commercial contextand the sort of homeowner
equivalent of businessinterruption could be thought of
as loss of use or additionalliving expense.
And that will probably be themost important coverage
immediately for homeowners whohave lost their homes in this
(05:51):
terrible tragedy.
That's going to pay, you know,essentially to maintain your
standard of living while yourhome is being rebuilt.
So it'll pay for your food andyour shelter.
Ideally you would get you knowthey would get you a rental, a
comparable rental.
That's going to be verydifficult to find at this point.
In the most near term you wantto get into a hotel.
(06:13):
Probably, if you can't livewith family, get into a hotel.
Maintain your receipts, anykind of food expenses that you
incur because you couldn't cookat home.
Make sure you're keeping closetrack of that and submit those
to your insurance company.
And you know, if you are livingwith family, it's probably a
good idea to enter into a leasewith them so that you have some
(06:35):
documentation as to costsincurred for that expense that
should be covered.
Speaker 1 (06:42):
Gotcha.
Okay, you know I was chattingon a completely separate issue
and you know there are peoplewho actually, who have lost
their lives in this and theestate lawyer I was talking to
said, you know, she started kindof like, well, what would I
want to happen?
And she, just, in that area oflaw, she said it'd be important
to have your life insurance gointo a trust so your family
(07:08):
won't be delayed in gettingfunds like that.
But that's just a side notethat I throw in there after
happening to just be speakingwith an estate lawyer about that
.
So next, so what aboutlimitations?
What kind of limitations mightpeople expect that would affect
their coverage?
Speaker 4 (07:29):
So I guess certainly on the home side, homeowners may
be looking at sublimits forcertain types of property
electronics, jewelry, fine arts,any kind of special or
customized furnishings,furniture and the like.
So they should be aware of that.
(07:50):
It's worth noting that, youknow, for both businesses and
for individuals, they may nothave at this time of crisis,
their insurance documents handy.
Time of crisis, their insurancedocuments handy.
It may be due to the fact thatthey went up in flames.
(08:11):
It may be that they've beendisplaced by civil authorities
so they can't enter theirpremises, even if their premises
are still standing.
And another issue, of course,may be that they may have just
renewed their coverage and notreceived their new insurance
documents.
At Anderson Kill we've seensituations where policyholders
(08:32):
aren't given their full formaldocumentation weeks, months,
sometimes years after bindingcoverage.
So it's a long way of sayingthat policyholders will want to
get their insurancedocumentation as soon as they
can.
If they don't have it handy,they can certainly request the
(08:54):
insurance agent, an insurancebroker or even the insurance
company itself to furnish thatdocumentation.
That should give you a goodhandle, certainly on what
sublimitations may be imposedinto the policy.
But it's certainly a good thingto look at and just to really
echo the points that Dennis andMarshall made about looking at
(09:18):
the coverages they have.
One thing to remember in all ofthis is not to make any
categorical assumptions aboutwhat is covered, what is not
covered.
There's a lot of variation onthe property insurance side,
even more so, I would argue, inthe commercial space and you get
(09:46):
your insurance on a broker form.
There are likely to be far morebells and whistles and very
broad grants of coverage,whether it's on the PD side or
it involves time elementcoverage like business
interruption, and even in theindividual homeowner space
there's some insurance companiesthat tout that they sell to
high worth individuals andtherefore sell a more robust
(10:09):
package of policies.
But again, try not to assumeanything.
Take a look at what thepolicies provide and try and
obviously get as much coverageas you can as quickly as you can
.
Speaker 2 (10:22):
And in terms of limits, I think you know the
commercial sense when yourpolicy will have a dollar value
limit for your building coverageand in most policies commercial
policies that's the limit.
I have seen some with somemargin clauses or escalation
clauses where if you, you know,inadvertently understate the
(10:43):
cost that it would require youto replace the building, they
will allow some type of marginor a cushion on top of that
limit, maybe 25%.
So you have to read the policyIn the homeowner context.
You see more of that and itdepends on what type of coverage
you purchase On the buildingside or the dwelling side.
You can have just actual cashvalue, where you're going to get
(11:07):
paid just a depreciated valueof the building at the time of
the loss.
You don't actually even get thereplacement cost coverage.
If you have replacement costcoverage they'll pay what it
costs to replace, but only up tothe stated limit.
You may have enhancedreplacement cost coverage that
allows you some cushion on topof the limit that's stated.
Again, it could be 25 percent,it could be a dollar amount.
(11:29):
So you have to look at thatvery closely.
Some policies you may even havea guaranteed replacement cost
coverage.
So if your homeowner's policysays you have a limit, a
dwelling limit of one milliondollars, but you have an
endorsement for guaranteedreplacement cost coverage.
Now you could just throw outthe $1 million.
If the costs actually exceed $1million to replace it, then
that's what you get.
Speaker 1 (11:56):
So you know you have to look at the coverages very
carefully and the limits thatare stated there.
Okay, and Josh, you mentionedyou know about documents and
things going up in flames.
I guess increasingly people areprobably putting more and more
on the clouds not everybody, butso they could access things
later.
I would think you know I'm aguy who can't find his wallet
half the time, so trying to finddocuments like that, I know a
(12:16):
lot of our documents because mywife has actually organized our
up on SharePoint or Google Driveor somewhere.
See, I don't even know wherethey are exactly up on
SharePoint or Google Drive orsomewhere.
See, I don't even know wherethey are exactly.
So jump next into hold on asecond Wanted to talk next about
.
You know these are verypractical and important aspects
(12:37):
of navigating the claims process, you know for effectively
managing and negotiating theseclaims related to fire damage,
including documentation, as Ijust mentioned, dispute
resolution and communication andpreserving your insurance
rights.
So who can kick off thediscussion about the claims
process?
Speaker 2 (12:56):
I'm happy to do it, unless one of you guys want to
talk.
No, marshall, we'll hear fromyou on the smoke BI.
Speaker 1 (13:04):
You don't want me doing it.
Speaker 2 (13:05):
Yeah.
So the most important thing,first and foremost, is to
provide notice.
Right, it seems obvious enough,but all property policies
typically require prompt noticeof the loss.
So make sure you're reportingthat to your insurance companies
.
You could do that through yourinsurance broker.
Just explain that you have aloss and that you need to report
it to all potentiallyapplicable insurance companies.
(13:28):
The next thing you need to dois they'll assign a claims
adjuster.
You know this is a tragedy,obviously of epic proportions.
This is a tragedy obviously ofepic proportions.
Insurance companies are goingto be spread thinly.
Their representatives will bespread thinly.
(13:51):
The adjuster you have today maynot be the adjuster you have
three weeks from now.
It's going to be a trying anddifficult process.
So make sure you have as muchof your communication in writing
as humanly possible, as much ofyour communication in writing
as humanly possible.
You should be documentingeverything that is occurring and
everything that is notoccurring on the loss.
Right, you should demand andexpect responsiveness from your
(14:12):
insurance company.
The fact that there are, youknow, hundreds of thousands of
people that have been affectedby this is no excuse.
They have obligations to adjustclaims promptly and fairly and
you need to hold them to that,and the way you do that is
document everything in writing.
Again, everything is happeningand not happening.
In the coming weeks you willneed to be documenting your loss
(14:33):
right.
So that might include and Iwould strongly urge you to
consider hiring a reputablepublic adjuster to serve as your
advocate.
That is someone who willprepare the claim on your behalf
, present it to the insurancecompany and fight for you.
The insurance company will hirewhat they call an independent
adjuster.
(14:53):
In my experience they'reanything but independent.
They work for the insurancecompany.
They're beholden to theinsurance company.
So you want representation onyour side, or at least it's
something you should stronglyconsider.
Public adjuster can help youput together the dwelling claim
or, in the commercial sense, thebuilding claim, the personal
(15:13):
property claim, the businessinterruption.
They will facilitate all ofthat and it's something to take
it off of your shoulders andhave a trained professional who
knows the policy and knows thedifferent coverages available to
you to put together that claim.
(15:41):
But pay very close attention toyour policy language as to when
a proof of loss is required tobe filed.
Sometimes it could be 30 or 60days from the loss and it's very
important that if you're notgoing to meet that deadline.
At a minimum you get anextension in writing agreed to
by the insurance companyrepresentative, or you file a
partial proof of loss 30, 60days.
You likely will not know theextent of your loss, so you want
(16:04):
to put in a partial proof ofloss to omit that requirement
and make very clear in therethat other additional amounts
are to be determined and thatit's without prejudice of your
right of recovery for additionalamounts under the policy.
For additional amounts underthe policy Other things to be
(16:25):
aware of.
Sometimes there is a deadline bywhich you must give notice of
your intent to rebuild.
That might be six months fromthe loss.
There may be a deadline bywhich you need to actually
replace your damaged property.
That could be 18 months or twoyears.
Read your policy very closely,because it varies, and make sure
you're complying with that.
(16:45):
Again, to the extent extensionsare needed, make sure you're
getting them in writing.
One of the most importantdeadlines you need to concern
yourself with is any suitlimitation in the policy.
That is basically a contractuallimitations period in which you
have to sue the insurancecompany.
(17:05):
You know general statutelimitations maybe three years,
six years.
These are much, much shorterand they're by contract, and
some of them say you need to suewithin a year of the loss.
I think California has astatute that extends it to two
years, but you want to checkthat.
To be in the context of firelosses like these.
I believe it's extended to twoyears under California law, but
(17:30):
you want to be very careful tomake sure you're complying with
that.
Otherwise, document your loss asfully and as thoroughly as
possible.
Don't wait for the insurancecompany to prepare their
estimates and tell you what theythink it's worth.
Do what you need to do to getthe building loss value, the
business interruption loss value, present it to them, and if you
(17:53):
can't get agreement, you shouldconsider filing what we call a
hostile proof of loss, where youdon't necessarily have an
agreement with the insurancecompany on the amount of loss
yet, but in order to get them toaccept or deny or take some
other action with respect toyour loss, you have to file that
proof of loss.
At that point they then haveeither 30 or 60 days to respond
(18:16):
to it, and should they reject it, then you need to know you need
to take the next step, andthose next steps could be some
sort of alternative disputeresolution.
Maybe it's mediation, maybeit's an appraisal process to get
valuation issues worked out, orit could be litigation.
Speaker 1 (18:36):
Yeah, from a human and practical standpoint, if I
could pause for a second.
I mean, just, you know, afriend sent me a photo of her
house.
I mean she literally waswatching it burn during the day
and then the later ones werejust embers at night.
And you know, she's got afull-time job, she's an attorney
working in-house at a bigcompany and she's got children,
(19:03):
got children and then just likesuddenly having this new project
to take all the things you'resaying, I mean, if you think
about all the things you'resupposed to be doing in life,
suddenly you listed just a wholebunch of things that somebody's
in charge of and I guess Idon't know how a person does it,
how an individual navigates itAt a company I'm assuming it
would be like a risk manager orsomeone you know who's.
This is what they're built todo.
Is that that accurate?
Speaker 2 (19:24):
Yeah, Risk management or misradiator, CFO, general
counsel typically.
Speaker 1 (19:30):
Yeah, yeah, yeah, and it's just the business
interruption part of it isinteresting.
I mean, there was supposed tobe a big hearing in a in a
antitrust case by Elon Muskagainst OpenAI and Microsoft.
It was this week.
Musk's attorneys lost theiroffices in the Palisades fire
and so that's been postponed.
(19:51):
So just like a busy lawpractice, like many busy
practices.
I just I don't know.
I don't have a question otherthan like how do you get through
it?
Speaker 2 (20:01):
Yeah, and you know.
On that point, tom, you thinkabout the?
Homeowners that lost all theirpossessions.
Speaker 1 (20:08):
Right.
Speaker 2 (20:08):
And what a difficult process that will be for them to
go in and itemize all of theirpersonal property losses.
Speaker 3 (20:16):
Right.
Speaker 2 (20:16):
Just incredibly trying and difficult process,
and some of it will be by memory.
Some of it will be by memory,some of it will be by.
You know, to the extent youhave video or photographs to try
to piece all that back together.
But there's just this hugeemotional component to it that
you know should be considered aswell and again, to the extent
you can get some assistance tohelp you through that, it
(20:40):
probably makes good sense to dothat.
Speaker 3 (20:42):
Yeah, and to answer your question how do you get
through it?
I mean, don't underestimate thepower of human fortitude, right
?
I mean, I've talked to peoplethere and, for the most part,
the people I talk to aredetermined people.
They know what's happening tothemselves, to their families,
to their businesses, and they'relaser focused.
(21:03):
The people I've spoken to knowexactly what they need to get
done and they're determined toget it done.
And trust me, I can speak, Ithink, confidently, for Josh and
for Dennis when I say thatdetermination is essential when
you're processing these claimsand working with insurance
companies.
What Dennis said before, I meanall of his advice about
(21:25):
documenting everything and justI want to emphasize one thing he
said, because the adjuster thatcame out to your plate, your
business or your house this weekmay not be the adjuster that's
coming out three weeks from now.
If you've documented everything, you don't have to get jerked
around by someone saying, ohsorry, I'm new to this, I don't
know what's going on.
You drop that file on them andyou say, well, welcome to the
(21:48):
file, here's everything that'shappened.
We're moving to the next step.
That's the determination thatit takes, and I believe that the
people in Southern Californiahave exactly what it takes to
get it done.
Speaker 4 (22:07):
Sure and Tom, since insurance is supposed to be that
lifeline that allows you torecover financially, you know,
rebuild your shelter, all ofthose things your business.
I know people during this kindof heartbreaking time of crisis
are understandably distracted,distraught and every other
emotion you can think of.
But dealing with the insurancebureaucracy is part of the job.
(22:32):
People have that determinationor they don't.
They have to go through thisprocess because the insurance
claims process can be veryunforgiving for people who miss
deadlines, even during somethingas catastrophic as this.
(22:53):
So we have seen so many courtsuphold the fine print, deny
coverage on the technicality.
So to the extent policyholderscan position themselves, even if
it is like finding another hourin the day that they don't have
.
It's so essential to do just toavoid calamity down the road.
Speaker 1 (23:19):
To add insult to injury, just to avoid calamity
down the road.
To add insult to injury, OkayWell, thank you for that
interruption, but I couldn'thelp but think about that as you
were talking.
So why don't we move next tomore about business interruption
?
Marshall, you mentioned itearlier business interruption
and smoke damage and things likethat.
(23:40):
So what can you tell us aboutthose kinds of claims?
Speaker 3 (23:44):
Yeah, so there's a history, a precedent that goes
back for a while.
I just got to frame this.
In order to trigger propertyinsurance coverage, you need to
have direct physical loss ordamage to property, either your
property or property someoneelse's property away from you,
if they're a supplier or acustomer.
(24:04):
The question arises when itcomes to smoke.
Well, is smoke and soot and ashdamage to your property that
triggers coverage?
The answer to that is yes.
You know a well-known case from2016 in Oregon held that
(24:26):
wildfire smoke that disruptedperformances at a theater for a
Shakespeare festival wasphysical loss or damage that
triggered coverage for thebusiness interruption that
resulted from those nearbywildfires.
The theater did not catch onfire, but when the winds were
blowing toward the theater, itwas too smoky to have
performances and the court heldin that case it's called Oregon
Shakespeare.
(24:47):
The court held that that is acovered business interruption
loss.
We saw during and the wake ofthe COVID pandemic that
insurance companies responded tothe pandemic by saying that
COVID doesn't cause therequisite physical loss or
damage to property and by andlarge, they were successful in
(25:08):
pressing that argument,including in the Supreme Court
of California.
But it's notable that theSupreme Court in California, in
deciding that case, looked tothis precedent of cases like
smoke, which has been held tocause physical loss or damage,
and they said COVID is differentfrom smoke, right Again
confirming that damage caused bysmoke is covered.
(25:30):
But the Supreme Court ofCalifornia held that damage
caused by COVID is not covered,right.
Fast forward to these wildfiresand the terrible disruptions
that smoke has caused to so manybusinesses in the area of those
fires.
Those losses continue to becovered and, ironically,
coincidentally, this Friday,this past Friday a federal
(25:55):
district court judge in SanFrancisco issued a ruling a
summary judgment ruling on acase that involved wildfire
smoke damage from some 2017wildfires in Napa.
(26:21):
What the court said in that casewas that, yes, smoke does cause
the direct physical loss ordamage required to trigger
business interruption coverageunder a standard property policy
.
And, interestingly, the courteven cited to the California
Supreme Court's decision in theCOVID case to make the point
that I just made a second agothat if smoke was covered before
and COVID is different, thensmoke continues to be different
from COVID and it does triggercoverage.
The timing couldn't be betterfor businesses in Southern
(26:42):
California to show theirinsurance companies and to
convince their insurancecompanies that the losses that
I'm suffering now because ofsmoke-related interruptions is
something that's covered undermy policies, and anyone who's
being told by an insurancecompany adjuster or someone that
they're hearing on TV speakingfor the insurance industry that
(27:04):
smoke doesn't cause physicalloss or damage should ignore
that feedback.
That's wrong and the judge inCalifornia said on Friday that's
wrong.
Speaker 1 (27:13):
Okay, I assume you're writing something about this.
It's so.
Speaker 3 (27:18):
it's funny because I wrote something about smoke
related indirect losses lastWednesday or so and we put that
out and just like clockwork, thejudge's order came down on
Friday, basically completelyvalidating what I had said in
the article that went out.
Speaker 1 (27:36):
OK, we'll put a link to what was the name of the case
.
Speaker 3 (27:39):
It's called Bottega versus Chicago it.
It came out of the NorthernDistrict of California January
10th 2025.
Speaker 1 (27:53):
OK, all right, I'll grab on, go ahead.
Speaker 2 (27:56):
Yeah, our partner, who, you know, is also doing an
article on this very subject aswell.
All right About a week or so.
Speaker 1 (28:03):
Okay, good, we'll look for that.
Was there anything else youwanted to say about business
interruption?
There were some other otherpoints that have come up before.
I know I remember from theCOVID issues around contingent
business interruptions, civilauthority things like that.
Speaker 4 (28:20):
Yeah, I was just going to say, and then, dennis,
please feel free to follow up onit.
Um, I think that again thisharkens back to the issue of
looking at your policies,knowing that not all policies
provide the same insuringagreements.
So do take a look and see howyour policies provide for time
(28:45):
element losses.
You know, business interruption, aka business income coverage,
is typically one variety ofcoverage and probably the main
one that has usually the largestlimit of coverage attached to
it.
But there are other timeelement coverages out there and
you know, along the lines ofwhat you just mentioned, civil
(29:06):
authority coverage is destinedto be rather relevant to what
has transpired in Los AngelesCounty.
Certainly there are othercoverages like ingress-egress
coverage, contingent businessinterruption coverage where you
yourself have not had propertydamage but property of someone
(29:29):
in the commercial stream ofcommerce who you're dependent or
relying upon may have.
So there are lots of differentcoverages to take a look at.
Service interruption coverageis another.
So multiple coverages may applyto a business claim and
(29:49):
certainly it's worth coming upto speed on what coverages
you've purchased and what thelimits are.
Some of these more exotic timeelement coverages may have a
sublimit and I believe almostall of the time.
Element coverages usually havea deductible of some variety,
(30:10):
usually expressed in hours, butagain that can vary policyholder
to policyholder.
Speaker 3 (30:19):
Okay, real good.
One other thing just worthmentioning and this is kind of
an interesting take on it butattraction property coverage.
Attraction property coverage isdesigned to compensate a
policyholder whose businessbasically depends on other
properties to attract businessto their location.
So I'm thinking abouthospitality businesses in this
(30:42):
environment.
Basically, Los Angeles is onfire and if you have a hotel in
the San Fernando Valley andyou've got basically fires on
one side of you and fires on theother side of you, that's
damage to basically whatattracts people to your business
, that is, your community is onfire.
(31:05):
You've never really seenanything quite like that.
I had a case once for somehospitality companies that lost
money because of landslidedamage on the Pacific Coast
Highway and, of course, peopledriving up and down the Pacific
Coast Highway Highway 1, is anattraction to that region of the
(31:25):
country, people that drive fromLA to San Diego, and that was
an interesting case.
So I think it's important forpeople to really look at their
policy carefully, as Josh andDennis said, think of all the
different extensions of coveragein there and ask themselves how
has my business been affectedin a way that triggers any of
(31:46):
these?
Speaker 2 (31:46):
coverages If your business itself did not actually
sustain physical loss or damage.
That does not mean that you'renot entitled to coverage.
You may not have suffered anydamage, but if you lose business
, if you lose revenue or profitbecause of damage in your
(32:08):
surrounding area, there may be acoverage under which you could
recoup those lost profits.
Speaker 1 (32:17):
Okay, good, that's all I had.
Speaker 3 (32:18):
I'm going to end it there, unless you guys had
anything else you wanted to addOkay, well, good, all I would
say, tom, and really from theheart and speaking on behalf of
all of us, it's hard to watchthe devastation that continues
to unfold in LA, but it'simportant to know that there is
a community, and I think peoplein LA know this.
It's important to know there'sa community across the country
(32:41):
that is watching and feeling andcaring about what's going on
and that we're here to help.
I think we've.
There's just been an outpouringof support in so many ways from
people around the country.
We are these insurance geekswho happen to know a whole lot
about how to move insuranceclaims forward, so we're happy
to help in that way.
But we're there on an emotionaland just support level also
(33:05):
because we watch thesecatastrophes all the time and
it's important for everyone toknow that there's people around
the country that are committedto helping Very good.
Speaker 1 (33:15):
Well, that's a good ending.
Thank you for that.
All right, thank you, guys forpulling this together so quickly
.
I want to get it out as fast aspossible, so I'll let you know.
Speaker 4 (33:22):
Thanks, tom, appreciate it.
Speaker 1 (33:24):
Thank you, guys.
That concludes this episode ofthe Emerging Litigation Podcast.
I'm Tom Hagee, your host, whichwould explain why I'm talking.
Please feel free to reach outto me if you have ideas for a
future episode, and don'thesitate to share this with
clients, colleagues, friends,and if you feel so moved, please
(33:44):
give us a rating.
Those always help.
Thank you for listening.
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