Taking Cover: Leveraging Insurance to Recover from Severe Weather

September 29, 2022

For business owners affected by Hurricanes Ian and Fiona and other extreme weather events and their aftermath, it is important, amid immediate concerns of public safety and restoring operations, to take timely steps to preserve and protect insurance rights. Financial losses caused by recent storms, fires, and other natural disasters are a significant and urgent problem resulting in over $65 billion in total losses in the first half of 2022. After responding to the initial concern for securing public safety, companies must evaluate next steps towards recovery.

Insurance is a key asset, the recoveries from which must be maximized to help rebuild after a severe weather event. Understanding how to do so can be a complex process filled with hidden challenges, but leveraging all available insurance coverage and effectively preserving and pursuing claims are crucial first steps towards recovery. Below are five key steps to help preserve and maximize insurance recoveries following a natural disaster.

1. Identify all available insurance policies. 

Locating and carefully reviewing all potentially applicable insurance policies is a critical first step in seeking recovery for a policyholder’s losses. The most likely source of coverage will come from a company’s first-party commercial property and business interruption policies. These policies, which can be marketed under a variety of different names by different insurers, typically contain the following key coverages:

  • Property Damage typically covers physical loss or damage to business premises and other property owned/leased by the policyholder.
  • Time Element/Business Interruption insurance refers to coverage for losses resulting from the inability to use damaged property for its normal uses, including, for example, loss of earnings or profits.
  • Contingent Time Element coverage insures against business interruption or extra expense losses caused by physical loss, damage, or other disruptions to a supplier, customer, or other party in a supply chain.
  • Extra Expense covers additional expenses incurred in excess of regular operating costs to continue or resume normal operations or mitigate losses while the loss or damage to property is ongoing or being repaired, replaced, or otherwise addressed.
  • Service Interruption generally covers damage to property and goods as well as income losses caused by interruption of utility services to covered premises, often requiring physical loss or damage at the utility service provider’s premises.
  • Ingress/Egress insurance provides coverage for losses incurred when access to and from an insured property is prevented by physical damage—i.e., flooding or a fallen tree prohibiting entrance.
  • Civil Authority usually covers losses resulting from a governmental authority order that interferes with normal business operations.

These coverages often have different applicable limits of liability or time limits, and different deductibles may also be applicable.

2. Comply with Notice, Proof of Loss, and Suit-Limitation Clauses.

Providing adequate notice is a crucial step in preserving rights under an insurance policy. Requirements for how and when to give notice or file a claim vary by policy and state law and need to be carefully examined. However, many policies require notice of a loss as soon as practicable. Because of these often-strict notice requirements, insurance recovery counsel, brokers, and agents should be involved immediately to assist with claims.

Generally, commercial property policies will require that a sworn proof of loss be submitted within 60 to 90 days, or sooner, absent written agreement by the insurer. Given the hardships facing policyholders after severe weather strikes, it is important to consider and be prepared to seek an extension from insurers for submitting any initial proofs of losses, as necessary.

In addition, many policies contain a requirement that any suit under the policy be filed within one or two years after inception of the loss. Insurers are often amenable to tolling agreements to permit an orderly claim evaluation, but such agreements need to be negotiated as early as possible. And as always, these timing and other requirements may be affected by applicable state law.

3. Document damage and maintain records. 

Evaluating the full extent of loss and damage following a hurricane, flood, storm, or fire takes time; however, a business should begin documenting and quantifying any damage or business interruptions caused by the extreme weather event as soon as possible. This may involve collaboration among the business’s operational, finance, and accounting personnel. Key actions include the following:

  • Separate any damaged property from undamaged property.
  • Photograph or video the damage, including structural damage, affected objects, and standing floodwater levels.
  • Itemize damaged or lost items, their date of purchase and value, and collect receipts.
  • Track extra or expediting expenses needed to continue business operations, such as (1) overtime pay, (2) costs of emergency gear and protective equipment, (3) added freight charges for quicker delivery of emergency supplies, (4) relocation costs, (5) advertising or notification costs, (6) costs associated with maintaining lost power, e.g., generators, or (7) costs for water or other impacted utilities.
  • Locate business accounting records relevant to financial performance and loss of earnings or revenue.
  • Obtain copies of fire, police, or other relevant reports.
  • Keep crisis response, evacuation, and other recovery-related purchase orders, invoices, receipts, and other documentation.

4. Cooperate with your insurance company. 

Many insurance policies require that the policyholder cooperate with the insurer’s investigation of a claim. Cooperation does not mean capitulating to unreasonable requests by the insurer or responding to requests that are irrelevant to a coverage determination or designed to limit or deny coverage or to increase the burden on the policyholder, but reasonable cooperation is generally required.

5. Engage an experienced team. 

In the aftermath of a severe weather event, hundreds of tasks need attention. Many businesses are not only managing their own losses and damages but are also working around the clock to meet the needs of their employees, customers, consumers, and other stakeholders. Given these concerns, it is important to think proactively and critically about assembling an insurance recovery team.


Morgan Lewis can assist ahead of the storm with insurance coverage preparedness and after the storm with claim notification and presentment, loss assessments, information gathering, proofs of loss, claim negotiation, and, if necessary, coverage litigation to enforce a policyholders’ insurance rights and maximize insurance recoveries.

Our insurance recovery and Latin America teams at Morgan Lewis have the expertise and deep cultural and business ties with the regions that have been and are being impacted by Hurricanes Ian and Fiona. Our team members, including those in our Miami office, are positioned to assist clients in preserving and pursuing recovery from their insurance for their property damage and resulting business interruption losses.


Morgan Lewis helps clients navigate the wide range of legal and regulatory challenges that can arise from severe weather events and natural disasters. Please visit our Severe Weather and Natural Disasters page for more information.

After the Storm: Maximizing Insurance Assets to Recover from Natural Disasters (09/15/2021)
Maximizing Insurance Assets Amid Extreme Weather Conditions (02/24/2021)
Hurricane Recovery Client Alert: Natural Catastrophe Insurance Claims (09/15/2017)
Hurricane Harvey Client Alert: Insurance Considerations (08/31/2017)


If you have any questions or would like more information on the issues discussed in this Insight, please contact any of the following: