October 7, 2002 by Canadian Underwriter
A report from PriceWaterhouse Coopers suggest business interruption (BI) losses now make up the largest segment of World Trade Center from the September 11, 2001 terrorist attacks.
BI now makes up about 30% of the total losses, up from an earlier estimate of 25% released in February, 2002.
PwC supports the US$40.2 total loss figure for all WTC losses as released by the Insurance Information Institute (III) recently. The report also notes that about half of these claims have been paid out.
BI losses have been difficult to peg for a number of reasons. “The exercise of calculating a BI loss is a difficult task under normal circumstances,” says Steve Kessler, eirector within the PwC insurance claims practice. “What confounds the issue for September 11, 2001, BI claims is the extent to which a distinction must be made, between a policyholder’s sales and revenues losses caused by the general economic impact of the event itself, versus those caused solely by physical loss or damage.”
Some BI claims have been paid out, while others remains outstanding, with some policyholders and insurers pulling economists to evaluate the level of loss. Losses range from temporary dislocation lease costs to a determination of what the business operations’ level would have been had the loss not occurred.