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Richard J. Lambert was named by Best Lawyers® as a 2021 Corporate Law “Lawyer of the Year.”

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Storms likely to cause new contract disputes in New Jersey

As almost everyone knows, people and businesses across the state of New Jersey were affected by Hurricane Sandy in late October and by the subsequent winter storm that followed. These two storms have left a massive wave of destruction in their paths as millions remain without power, gas or food. Much of this destruction has been physical, and obviously a rebuilding period will be necessary. But what might not be as obvious are the contract disputes these storms have likely caused — especially between insurance companies and covered businesses.

One thing that many businesses were sure to do after the two storms hit was to contact their insurance company. However, with two major storms so close to one another it may difficult for the companies to determine what damage was caused by which storm. In many cases, insurance adjusters had not even made it out to inspect damage from Sandy before the nor’easter hit. This can cause litigation over what damage is covered under insurance contracts and what storm caused it. Furthermore, it will mean that businesses will be required to pay two deductibles to be eligible for coverage at all.

Litigation will also likely stem from claims about interrupted business. Insurance companies may fight businesses on the types and lengths of delays in businesses that are covered by specific plans. Parties are likely to fight about specific contract terms in order to determine if a business should get paid.

As is the case with any type of contract dispute, it is important for all parties to carefully examine the contract and try to come to an agreement. If agreement is not possible, litigation may ensue.

Source: Insurance Journal, “Post-Sandy Snowstorm Causes New Damage, Complicates Business Insurance,” Ben Berkowitz, Nov. 8, 2012

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