Drought and heat are not generally insurable risks because they would most likely be classified as Acts of God or a Force Majeure. This Article examines one facet of insurance coverage that has not been addressed very much either in the case law or in the literature: “Loss Business Income” (“BI”) and “Loss of Use” (“LOU”) in the context of drought. These policy provisions in the commercial general liability policy usually occur when a business cannot generate income or is unable to use its premises. For example, when does a boat rental facility that sits on a lake and is confronted with a shrinking water body due to drought file a claim for LOE or BI? When the lake recedes 20 per cent and there is a slight decrease in the number of rental customers or, when the lake dries up and no customers whatsoever show up to rent boats.


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