Possibly within the next week it will be made clear how insurance policies will respond to losses depending on the specific terms and conditions of each contract. But Schweers says he definitely anticipates disputes over deductibles even though regulators in some of the hardest hit areas have told insurers they cannot use hurricane deductibles—which are based on a percentage of insured value, rather than a flat deductible.

“That's their position, but from the attorneys I have spoken to, they clearly think disputes will arise if there's enough money at stake,” Schweers says. “We could be talking about a claim for $500 million. There's a lot riding on that decision.”

Another issue yet to be determined is whether companies' policies are occurrence-based or location-based. In occurrence, one event—in this case Sandy—would be considered a single occurrence causing a loss to all locations. But with a location-based approach, separate deductibles could be applied to losses at each location.

“Companies are consulting their legal counsel, asking how this is all going to shake out,” says Schweers, who advises clients to stay in communication with insurers and collaborate with them. Companies should give their insurer immediate notice of a potential loss and, after several weeks, companies should provide insurers with a range of the magnitude of losses in order for the insurer to properly reserve.

“This is critical to the end result: the end settlement,” he says. It could take six to 12 months to reach a settlement, but it's not unusual for a large account to take up to 24 months to be settled.