The shocking and tragic collapse of the Francis Scott Key Bridge over Baltimore Harbor on Tuesday is already having significant impacts on trade and transportation throughout the East Coast region, with ship traffic in and out of the Port of Baltimore suspended until further notice. As a result, businesses that depend on the Port of Baltimore and its supporting infrastructure for shipment and distribution of cargo are facing significant financial losses in the coming weeks and months. Similarly, as the issues surrounding liability related to the collapse become more clear in the coming weeks and months, companies may find themselves at the center of legal liability claims arising from various aspects of the disaster.   

Fortunately, much of this loss is likely to be covered by insurance, as long as the companies that purchased it take appropriate steps to preserve and maximize the value of their claims. Some preliminary steps companies can take to ensure they are extracting the full benefits of the insurance coverage they paid for include: 

• Read your insurance policies carefully. The Key Bridge collapse implicates several types of policies that may provide coverage, including:
  • Business interruption and contingent business interruption: Many property policies contain these coverages, which replace lost income when a company’s business cannot fully operate, or when it cannot obtain needed components from its suppliers, as a result of some physical damage like the Key Bridge collapse. Maximizing this coverage will require a careful tracking and computation of lost income.
  • Marine cargo and supply chain coverage: Marine cargo policies typically cover materials and products on ships in transit against physical loss or damage. Some (but not all) exclude loss of, or damage to, products due to delay. Where marine cargo insurance does not cover delay related losses, it may be covered by supply chain insurance, which may also cover loss due to delays or delivery failure of goods and services from suppliers.
  • Liability insurance: Legal liability for various aspects of the Key Bridge collapse will take months or possibly years to be sorted out entirely. For companies that become liability targets, various types of liability coverages, including general liability and directors and officers may provide much-needed funding for judgments, settlements, and the cost of defending against the claims.   
• Be proactive. Insurance policies typically require policyholders to make their claims expeditiously, or at least within a reasonable time. Taking a “wait and see” approach is not advisable. Companies typically should use general, broad language when notifying their insurers of claims, and should take considerable care in assuring that they are timely meeting the conditions for coverage set forth in their policies.   
• Quantify the claim. Gather and preserve information that quantifies the effects of the bridge collapse on the company’s business, including lost profits and unexpected expenses.
• Stay on your insurance company’s radar. Make sure that your insurer is responding promptly to your communications. If necessary, write letters demanding information on the status of your claim and explanations of any coverage positions they may have taken. If you don’t hear back, follow up on those requests.
• Speak with policyholder-side insurance experts. Insurers do not profit from paying claims, and will assert whatever defense they believe will absolve or mitigate their coverage obligations. Insured companies should have an advocate that is highly experienced in making sure they receive the full benefit of their policies. This is what the attorneys in Reed Smith’s Insurance Recovery Group do all day, every day. We would be pleased to speak with you about ways we can help navigate your insurance claims during this challenging time.