How First-Party Insurance Policies Respond to Catastrophic Weather Event Losses

As Hurricane Harvey and such storms sadly remind, policyholders must focus on how their first-party insurance policies — including their commercial general liability, marine cargo and inland marine, boiler and machinery, and equipment breakdown policies — respond to losses caused by catastrophic weather events. Property policies, broadly speaking, reimburse physical damage to buildings and business property, such as equipment, inventory, and machinery. They pay the cost to repair, replace or rebuild damaged property, and that which has lost its use, value and/or function. Some policies will treat Harvey as one event (thus, only one deductible will apply); however, others many define an “occurrence” as any loss within a 72 hour period, potentially triggering multiple deductibles.