Although the number of displaced people from this season's hurricanes is staggering, one of the main costs facing insurers is business interruption claims.
"Insurance companies will pay billions of dollars in business interruption losses as a result of Hurricane Katrina, but how many billions is still anyone's guess," analysts for Advisen wrote in a recent bulletin. "Business interruption losses are difficult to estimate under the best of circumstances. The still-evolving situation in the aftermath of Katrina means that it will take months before insurers have a good handle on their business interruption liabilities."
Calculating hard numbers is difficult for a variety of reasons. As of this writing, many parts of the area still were not accessible to adjusters, and the environmental impact of the storms and flooding may not be fully understood for years. An added complication is the uncertainty regarding insured and uninsured losses. Although insurers are arguing that most of the damage was the result of flooding lawsuits have been filed challenging that assumption.
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