Should Flood Aggregate Limit Apply To "Downstream" Financial Losses Like Delay In Completion?

Originally published by Shaun Marker .

It is official—in a case of first impression in New York,1 the appellate court will decide if a policy flood aggregate limit will apply to “downstream” financial losses such as delay in completion. The policyholder has filed the appellate brief on December 3rd requesting the appellate court to review the trial court’s ruling of first impression we discussed in: Delay in Completion Losses Under a Builders Risk Policy – Part 2.

Back in June, 2014, the New York trial court issued an order in a case involving delay in completion coverage under a builders risk policy where damage was sustained during Hurricane Sandy. The determination at the trial court level was that the policyholder was entitled to recover the total of $5 million for flood damages, physical damages and the economic delay in completion losses sustained in Sandy, since they stemmed from the flood. The court ruled that the flood deductible was also applicable to the loss. We knew the case would…

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