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Hurricane Sandy: Beyond the Physical Impact on Businesses – and How to Recover

Have you and your business been impacted by Hurricane Sandy? Many have been impacted by the hurricane both personally and professionally and many await full restoration of transportation, utilities, elimination of gas lines, and the ability to resume business as usual. While physical property damage is visibly evident, the impact on a business’ operations should not be overlooked. The massive disruptions caused by Hurricane Sandy will likely result in incremental expenses and business interruption losses (also known as lost profit damages) which may be highly significant and, for some businesses, may exceed physical damage losses.  

Such losses may include:

  • Lost profits (revenues less variable costs);
  • Lost customers;
  • Increased costs; and
  • Missed opportunities for new business.

This update can help educate business owners about their options as they address Hurricane Sandy losses, including business interruption losses, which may be covered under business property insurance policies.  When business owners are focused on resuming their operations, as they should be, they may lack the resources as well as the expertise needed to recover additional expenses and business interruption losses.  Engaging experienced professionals to develop loss recoupment strategies and prepare damage analyses to support claims will enable business owners to focus their energies on restarting and operating their businesses.

What Do Business Interruption Losses Look Like?
The graph below represents the relationship between the potential loss and actual performance of a business experiencing a business interruption event.

Businesses should have a “roadmap” to resume operations as soon as practicable, while, simultaneously having a “game-plan” that will result in the recoupment of losses. Accordingly, some preliminary steps towards recovering losses include:

  • Contact the insurance company to provide notice of claims;
  • Consult with legal counsel to determine scope of insurance coverage;
  • Identify the types of losses that that fall within insured coverage; and
  • Begin the process of documenting and quantifying insured losses.

CohnReznick has extensive business interruption claim experience.  Having worked directly with businesses along the Gulf Coast impacted by Hurricanes Katrina, Rita, Gustav, and Ike, we have considerable expertise in guiding clients through the recovery process described above.

Our experience working closely with HUD and FEMA’s joint Disaster Housing Assistance Program, as well as other clients, allows CohnReznick to provide businesses with specialized advice related to the complex processes required to address Hurricane Sandy losses. 

For additional information or to discuss how CohnReznick Advisory Group can assist you in recovering business interruption damages, please visit our webpage and contact:


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