Two clients, who own a few restaurants in the New England region, were shut down when the civil authorities made it temporarily illegal to drive on the roads during a recent blizzard. All roads were shut down due to the high winds, building debris/signage in the roads, downed power lines, downed trees, and excessive amounts of snow. My clients have been advised by their insurance carriers that their business income coverage will not respond to this situation.

The policies include Cause of Loss – Special form, CP 10 30 06 07 and an actual loss of business income endorsement. Both loss income forms have been endorsed to include a twelve-hour deductible.

It has always been my understanding that additional coverage is afforded if the following standards are met: (1) the civil action must occur due to a covered cause of loss; (2) the civil action prevents access to the insured location; and (3) the civil action was due to physical loss or damage to property other than the insured location.

I believe the recent blizzard and civil action prohibiting all travel satisfies the policy requirements for coverage. Please refer to the court case, Assurance Company of America v. BBB Service Company, Inc. 593 S.E.2d 7 (Ga. Ct. App. 2003 ). The appeals court upheld that the policy did cover the lost business income.

Vermont Subscriber

You are correct that the three conditions you listed must be in place. The one that may be iffy in this scenario is if any damage occurred that caused the civil authority action. A large amount of snow in and of itself is not damage. It may make conditions hazardous and necessitate the closing of the roads, but it is not damage. The key would be showing that the damage you mention—debris on the road and downed trees and power lines—necessitated the civil action to close the roads.

Also, we do not have access to a copy of the endorsement you mention, but the ISO civil authority provision on the Business Income form's (CP 00 30 06 07) additional coverage for civil authority requires that the damage that caused the civil authority action be within a one-mile radius of the described premises.

The possible difference between the scenario you present and that presented in the Assurance court case is that the court found that there was damage off the described premises that prompted the evacuation order that caused BBB to be closed. There would have to be a similar situation for your clients in order for coverage to apply.

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