Insurance for a "Superstorm"

A new report from the Bay Area Council Economic Institute estimates that a superstorm like Sandy is overdue and could cause over $10 billion in damage to the San Francisco Bay Area. Homes, employment centers and civic infrastructure are all exposed. The report’s experts caution that the Bay Area is unprepared for such a storm, and urge local governments and businesses to examine their contingency plans.

Pillsbury attorneys contributed to the report with comments on risk management and insurance issues. "Companies and governments should engage in disaster response planning, starting with construction and improvement of infrastructure that can reduce the physical impact of the event," said Bay Area Council Economic Institute trustee and infrastructure development lawyer Rob James, a San Francisco partner at Pillsbury. "But risk management techniques such as insurance procurement are essential to mitigate and transfer the event's economic consequences."

“Lender requirements on flood insurance should be reviewed, while flood and other property policies should be compared to identify potential coverage gaps. Also companies should consider the scope of coverage available for business interruption losses that are likely to result from a major storm,” said Robert Wallan, a Los Angeles partner at Pillsbury and co-leader of the law firm’s insurance recovery and advisory group. “Property exclusions for loss by flooding can complicate claims following major storms. Analyzing policies and their exclusions before a loss can help policyholders avoid costly coverage gaps.”

To read Pillsbury’s comments on insurance coverage, click here.