In a report issued Sept. 30, PricewaterhouseCoopers reports that business interruption (BI) losses associated with the Sept. 11, 2001, events have risen from 25 percent to 30 percent of total World Trade Center (WTC) loss estimates.
BI coverage continues to represent the greatest portion of WTC claims, representing nearly 30 percent of the industry’s total associated losses, up five percent from PricewaterhouseCoopers’ initial Feb. 2002 estimate.
Liability, property and life comprise the remainder of overall insurance loss estimates. Total overall WTC loss estimates continue to fluctuate but have been revised down from approximately $70 billion to $40.2 billion. To date, approximately half of this amount has been paid against the more than 33,000 Sept. 11 related claims.
“The exercise of calculating a BI loss is a difficult task under normal circumstances,” Steve Kessler, Director within the PricewaterhouseCoopers Insurance Claims practice, said. “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.”
Kessler noted that for some of the larger and more complex claims, economists have been engaged by insurers and policyholders to help evaluate overall claim and loss impact. Claims that are easier to measure and review by the insurers are generally being paid out accordingly.
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