The U.S. Court of Appeals, Second Circuit, has ruled that a policyholder need not own or lease a property to be eligible for business interruption coverage. In Zurich American Insurance Co. v. ABM Industries, Inc., No. 04-0445-cv (2d Cir.), the court found in favor of ABM, an engineering and janitorial company that provided extensive services in the World Trade Center.

The Second Circuit reversed summary judgment entered in Zurich's favor by the lower court, and granted ABM summary judgment that its loss of income from destruction of the WTC Complex on Sept. 11, 2001, was covered business income. The District Court for the Southern District of New York had capped ABM's recovery of loss of income at the $10,000,000 sublimit for contingent time element. The appellate court's ruling will permit ABM to argue that it has business income coverage for losses totaling more than $100,000,000.

ABM provided various janitorial, electrical, and engineering services for Silverstein Properties and tenants of the WTC, in the common and tenanted areas. At issue was whether ABM's loss of income from destruction of the buildings was covered as business interruption, loss from property "used" or "controlled" by ABM, or as contingent time element (contingent business interruption), loss from property "not operated" by ABM but, rather, by ABM's customers.