Hurricane-damaged US firms dig in for insurance fight

A car dealership is covered by Hurricane Harvey floodwaters near Houston. (Reuters)
Updated 15 September 2017

Hurricane-damaged US firms dig in for insurance fight

NEW YORK: Business owners who are trying to get back on track after hurricanes Harvey and Irma now face a different sort of challenge: trying to recoup lost income from their insurers.
Exclusions in the fine print of policies, along with waiting periods and disagreements over how to measure a company’s lost income, make business interruption claims among the trickiest in an industry renowned for complexity.
“I think the whole thing is a rip-off,” said Thomas Arnold, an optometrist in Sugar Land, Texas. He said his business, Today’s Vision, was shuttered for almost five days after Hurricane Harvey struck because nearby flooding kept employees and patients from getting there.
Arnold says he pays $1,083 per month for coverage. But after he filed a claim, he said the US unit of Zurich Insurance Group, rejected it because his business was not physically damaged.
Zurich does not comment about specific claims, the company said in a statement. It added that business interruption coverage generally requires “direct physical damage” to a property for a payout.
It was Arnold’s second disappointing experience with business interruption coverage. He said another insurer denied his claim in 2008 after a nine-day power outage from Hurricane Ike.
Devastating storms are hitting the US with increasing frequency. Risk modeling firm AIR Worldwide predicts losses to all properties from the flooding in Texas alone will be $65 billion to $75 billion, regardless of whether they are insured.
The income lost by shuttered firms makes up a significant chunk of overall losses from a natural disaster and can hobble the pace of a community’s economic and social recovery.
Hurricane Katrina in 2005, for example, caused about $25 billion in insured commercial losses, of which $6 billion to $9 billion has been attributed to business interruption, according to information posted on AIR’s website.
The National Flood Insurance Program does not offer a business interruption component. The program is largely used by homeowners, but it also covers commercial structures for up to $500,000 in damage, with another $500,000 for the contents.
That is why companies able to afford the additional protection of business interruption insurance, usually large and medium-sized firms, often purchase it despite the potential for unsuccessful and drawn-out claims.
Big Star Honda, a car dealership in Houston, lost 600 vehicles – 95 percent of its inventory – and was shut for five days after Harvey.
Its managers are now girding themselves for a potentially long slog with the firm’s insurance company as the dealership prepares to make a claim on its business interruption policy.
“We’re collecting every single invoice that pertains to the hurricane,” said Allen Paul, Houston regional vice president of Ken Garff Automotive Group, which owns the dealership.
“I’m really curious to see how that goes,” he said.


Hong Kong police warn of ‘live fire’ if they face deadly weapons from protesters

Updated 17 November 2019

Hong Kong police warn of ‘live fire’ if they face deadly weapons from protesters

  • Protests have tremored through the global financial hub since June
  • China has repeatedly warned that it will not tolerate the dissent

HONG KONG: Hong Kong police Monday warned for the first time that they may use “live rounds” after pro-democracy protesters fired arrows and threw petrol bombs at officers at a beseiged university campus, as the crisis engulfing the city veered deeper into danger.
Protests have tremored through the global financial hub since June, with many in the city of 7.5 million people venting fury at eroding freedoms under Chinese rule.
China has repeatedly warned that it will not tolerate the dissent, and there have been concerns that Beijing could send in troops to put an end to the spiralling unrest.
Three protesters have been shot by armed police in the unrelenting months of protests. But all in scuffles as chaotic street clashes played out — and without such warnings being given.
A day of intense clashes, which saw a police officer struck in the leg by an arrow and protesters meet police tear gas with volleys of petrol bombs, intensified as night fell.
Clashes rolled across Kowloon, with the epicenter around the Hong Kong Polytechnic University (PolyU), where scores of defiant demonstrators set large fires to prevent police from conducting a threatened raid on the campus.
They hunkered down under umbrellas from occasional fire from water cannon and hurled molotov cocktails at an armored police vehicle, leaving it ablaze on a flyover near the campus.
Police declared the campus a “riot” scene — a rioting conviction carries up to 10 years in jail — and blocked exits as spokesman Louis Lau issued a stark warning in a Facebook live broadcast.
“I hereby warn rioters not to use petrol bombs, arrows, cars or any deadly weapons to attack police officers,” he said.
“If they continue such dangerous actions, we would have no choice but to use the minimum force necessary, including live rounds, to fire back.”
Police said they fired at a car late Sunday that had driven at a line of officers near the campus — but the vehicle reversed and escaped.
Protesters at the campus appeared resolute — a twist in tactics by a leaderless movement so far defined by its fluid, unpredictable nature.
“I feel scared. There’s no way out, all I can do is fight to the end,” said one protester joining the barricade in front of the university building.
“We need a base to keep our gear and have some rest at night before another fight in the morning,” another called Kason, 23, told AFP.
On Sunday, activists parried attempts by police to break through into the PolyU campus, firing rocks from a homemade catapult from the university roof, while an AFP reporter saw a team of masked archers — several carrying sports bows — patrolling the campus.
Violence has worsened in recent days, with two men killed in separate incidents linked to the protests this month.
Chinese President Xi Jinping this week issued his most strident comments on the crisis, saying it threatened the “one country, two systems” model under which Hong Kong has been ruled since the 1997 handover from Britain.
Demonstrators last week engineered a “Blossom Everywhere” campaign of blockades and vandalism, which forced the police to draft in prison officers as reinforcements, shut down large chunks of Hong Kong’s train network and close schools and shopping malls.
The movement, characterised by its fluidity and unpredictability, has started to coagulate in fixed locations, showing the protesters’ ability to switch tactics.
The protests started against a now-shelved bill to allow extradition to China but have billowed to encompass wider issues such as perceived police brutality and calls for universal suffrage in the former British colony.
The financial hub has been nudged into a recession by the unrelenting turmoil.
A poster circulating on social media called for the “dawn action” to continue on Monday.
“Get up early, directly target the regime, squeeze the economy to increase pressure,” it said.
The education bureau said schools will remain closed again on Monday.
Earlier on Sunday, dozens of government supporters gathered to clear barricades near the university campus — a sign of the divisions slicing through the city.
Many residents are wearied by the sapping protests. Others support the Chinese-backed city government.
Some applauded a Saturday clean-up by Chinese troops from a garrison of the People’s Liberation Army in Kowloon.
The garrison is usually confined to the barracks under Hong Kong’s mini-constitution, although it can be deployed at the request of the city’s government to help with public order breakdown or natural disasters.
Hong Kong’s government, which presides over a city that enjoys greater freedoms than the mainland, said it did not ask the PLA for help on Saturday.
The choreographed troop movement “has only compounded the impression that Beijing has simply ignored” Hong Kong’s unique political system, said analyst Dixon Sing.