Insurance Coverage For Power Interruptions - In California and Elsewhere

Policyholder Advisor & Alert

PUBLISHED ON: February 1, 2001

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This article also appeared in the Corporate Legal Times (March 2001)

Power interruptions could impact you wherever you are. As California’s utilities hover on the brink of bankruptcy, California businesses in particular face rolling blackouts, brownouts and other “service interruptions.” These power disruptions, occurring with at most a one-half hour warning, may spell serious problems for many businesses in California and elsewhere. Imagine, for example, that you’re a large dairy with thousands of gallons of milk needing constant refrigeration. Or that you’re a semiconductor manufacturer with hundreds of silicon wafers in mid-production in your “clean room.” If the electric utilities flip the switch on you, you stand to lose and to lose big. That’s the bad news.

The good news is that you already may have insurance to cover your losses. Your property insurance, specifically your business interruption insurance, should provide coverage.