Texas Business Interruption Cases
The winter storms in Texas this year caused considerable damage and destruction. In addition to property damage and loss of life, many businesses suffered interruptions that led to significant financial losses.
Much of this harm was avoidable. If the Electric Reliability Council of Texas (ERCOT) and government officials had taken the proper steps to protect Texas’s power grid from cold weather, they could have prevented many of the storm’s worst consequences. While Texas is not known for below-freezing temperatures and snow, such events occasionally happen. Other winter storms have caused problems for the Lonestar State in the past.
Despite these prior experiences, the people who provide power to Texans never took the recommended measures to safeguard their technology. There are ways to keep the power working under such conditions. Other parts of the country regularly experience winter weather without the loss of power that Texans saw this year. Now, ERCOT and other responsible parties are facing lawsuits related to losses that many in the state suffered because of negligence.
How The Storms Harmed Businesses
The storms caused physical damage to many structures by freezing pipes, which led to flooding in some homes and businesses. Many business owners may need to perform repairs, which can be costly. The damage and necessary repairs that resulted may even prevent businesses from reopening soon, which could lead to further loss of revenue.
While these losses may add up, businesses may suffer further damages due to the storms, power outages, and loss of water service. In addition to the harm they suffered, businesses could have been affected by suppliers that also faced delays and consequences from the storms’ harm. In some cases, the interruptions to the supply chain could impact businesses both in and out of Texas.
Business Interruption Claims
Many businesses carry insurance policies that provide coverage for unexpected losses related to events that disrupt business. COVID-19, for example, has caused many businesses to suffer losses outside of their control. Restaurants, bars, salons, gyms, and numerous other types of businesses lost clients because of the lockdown orders that forced temporary closures and due to consumers’ fear about going out in public and entering these establishments because of the virus. Businesses’ insurance companies may have compensated businesses for some of the loss in revenue.
In some cases, bad weather alone might mean less business, but in the case of a storm that knocks out power and water, the damage is severe enough to cause lasting financial harm to many companies. Business owners may be able to turn to their insurance policies to recover some of those losses and help keep their operations afloat despite the storm and related destruction.
Conflict In Business Interruption Claims
One difficulty business owners sometimes encounter is how to calculate their losses. There are several basic considerations that insurers may consider in determining the lost value.
The insurance company probably will first determine the net loss of income that the business experienced. Insurance companies determine this by estimating what the company might have earned had it not suffered an interruption in business. This can be challenging to calculate, and insurance companies and policyholders often disagree on how to calculate the amount of income the business would have earned under normal circumstances.
The insurer then will deduct from the net income certain expenses that the business would have had if its regular operations had not been interrupted. For example, if you are a business owner and, during the interruption, you did not have to spend money on usual expenses like purchasing food or paying hourly workers, the total loss that the insurance company estimates your business suffered may be lower than the revenue that your business missed.
In the Texas storms, the damage was not just due to the weather conditions. ERCOT’s failure to provide power during the storms created much of the harm. Many insurance companies may end up filing claims against ERCOT to try to get ERCOT to contribute to the payment of policyholders’ claims.
For many business owners impacted by the storm, recovering proper compensation for their losses might be essential to be able to stay in business. However, it might be difficult to make a full recovery, as insurance companies are expected to face an estimated $20 billion in total claims related to the disaster.
Glen Larson Law – Business Interruption Claim Lawyers
Getting a business interruption claim approved can be a stressful process. Because of this, you should consult with an experienced business interruption claim lawyer in Austin who has the expertise to get you through this process as soon as possible. Glen Larson Law represents Texas businesses in their claims against insurance companies. We can help you understand your options and can fight on your behalf to ensure that the insurance company pays you what they are required to under your policy. If you are considering making a business interruption claim and want someone fighting for your rights, then reach out to Glen Larson Law for a free consultation by calling +15128830277 or by contacting us online.