Snowstorm Ineligible for Business Income Coverage

Commercial Lines - Property	No Suspension of Operations
Time Element	Business Income Denied

The owner of a car dealership filed a claim for lost income caused by a snowstorm that forced the business to close for a week. The dealership's commercial property insurance policy covered business interruption losses. The snowstorm damaged the roof, and the snow blocked roads prevented access to the dealership. This resulted in the business being closed until the roads were cleared.

The insured submitted two claims: one for the roof damage and another for the lost profits during that week.

The roof repair cost was paid, but the insurer denied the claim for more than $50,000 in lost profits because the roof damage did not cause any business interruption. The insured filed for summary judgment and contended that the dealership's inaccessibility due to the storm was equivalent to the business being damaged and closed for repairs. The court reviewed the policy language and denied the insured's motion. The decision was appealed.

The appeals court reviewed the facts of the claim and the policy language. They focused on several parts of the policy that dealt with business interruption, particularly the following:

"BUSINESS INCOME COVERAGE FORM (AND EXTRA EXPENSE), A. COVERAGE

We will pay for the actual loss of Business Income you sustain due to the necessary suspension of your "operations" during the period of restoration. The suspension must be caused by direct physical loss of or damage to property at the premises described in the Declarations..."

The appeals court ruled that instead of providing protection against all types of business interruption, the policy explicitly covered only those caused by "direct physical loss from an insured peril." The dealership's income loss was solely due to the snowstorm that blocked access to the dealership. This situation was not covered by the policy, and the court affirmed the trial court's decision in favor of the insurer and against the insured.

Harry's Cadillac-Pontiac-GMC Truck Company, Inc., Plaintiff-Appellants v. Motors Insurance Corporation Et Al., Defendants. Florida District Court of Appeals. No. 96-1351. July 2, 1997. CCH 1997 Fire and Casualty Cases, Paragraph 6189.