The insurance issues that arise in connection with mass torts have been studied with some care. These issues most often involve corporate claims for coverage under Commercial General Liability (“CGL”) insurance policies. The insurance issues that arise in connection with what might be called “mass disasters,” however, have received less attention. These are natural and man-made disasters whose center of gravity is not tort, and therefore not liability insurance, but personal and property losses. The mass disaster that occurred on 9/11 did spawn a variety of non-liability insurance disputes. But even these disputes mostly involved different forms of corporate insurance, such as commercial property and business interruption coverage claims.
The losses that arose out of Hurricane Katrina in August 2005, in contrast, heavily involve individual insurance issues. In particular, tens of thousands of homeowners whose residences were damaged or destroyed by the hurricane had standard homeowners insurance. These policies insure the risk of direct physical loss to the policyholder’s home and other property, subject of course to certain exclusions from and limitations on coverage. The key exclusion in this instance precludes coverage of loss resulting from “flood.” The typical policy also contains an anti-concurrent causation clause, which provides that excluded losses (such as those caused by flood) are not covered “regardless of any other cause or event contributing concurrently or in any sequence to the loss.” Claims made for Katrina-related losses under these seemingly simple policy provisions have spawned widespread litigation and controversy. This Essay briefly surveys these issues and comments on their implications for the availability of insurance coverage in the future.
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