Property Damage and Insured Losses from the 2001 World Trade Center Attacks

Grossi, Patricia

doi:10.2202/1554-8597.1163

Cited by 8 publications

(5 citation statements)

References 1 publication

Supporting

Mentioning

Contrasting

Order By: Relevance

“…3 "Extra expenses" or "expense to reduce loss" clauses pay for policyholder's efforts to avoid or minimize loss. 4 BI insurance was not meant to cover all negative effects from covered perils and is no substitute for actual income. Calculating business interruption losses is speculative and difficult to prove.…”

Section: Resultsmentioning

confidence: 99%

“…Having detailed proof and documentation of income loss (financial statements, ex-ante profit expectations, and extra expenses) will provide an audit trail to help expedite claim. 4 Having a team to manage the entire restoration and claims process will expedite payment of claims. 9 Must give notice of claim ASAP to allow adjusters to begin claim process and ensure no delays on the business's part.…”

Section: Management Effectivenessmentioning

confidence: 99%

“…9 Must give notice of claim ASAP to allow adjusters to begin claim process and ensure no delays on the business's part. 4 Team could include engineers and repair specialists, management from risk, financial and operations, sales, legal counsel, forensic accountants. 9 Speeding restoration Thompson.…”

Section: Management Effectivenessmentioning

confidence: 99%

“…Studies of recent and projected disasters have ascertained that the sum of ordinary and contingent BI losses can rival and even exceed property damage. Estimates of property losses from Hurricane Katrina are nearly $100 billion, but BI losses now exceed $100 billion and counting because these losses just start at the time the disaster strikes and continue to rise until the regional economy has recovered to its predisaster trajectory or to a “new normal.” Total property damage (insured and uninsured) from the September 11, 2001 terrorist attacks on the World Trade Center is estimated at about $25 billion, but the consensus estimates of total BI losses are between $40 and $100 billion . Estimates of property damage from a hypothetical 8.2 Southern San Andreas Fault earthquake are $100 billion, with the associated BI losses at $67 billion .…”

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Improving Catastrophe Modeling for Business Interruption Insurance Needs

Rose

Huyck

2016

Risk Analysis

View full text Add to dashboard Cite

While catastrophe (CAT) modeling of property damage is well developed, modeling of business interruption (BI) lags far behind. One reason is the crude nature of functional relationships in CAT models that translate property damage into BI. Another is that estimating BI losses is more complicated because it depends greatly on public and private decisions during recovery with respect to resilience tactics that dampen losses by using remaining resources more efficiently to maintain business function and to recover more quickly. This article proposes a framework for improving hazard loss estimation for BI insurance needs. Improved data collection that allows for analysis at the level of individual facilities within a company can improve matching the facilities with the effectiveness of individual forms of resilience, such as accessing inventories, relocating operations, and accelerating repair, and can therefore improve estimation accuracy. We then illustrate the difference this can make in a case study example of losses from a hurricane.

show abstract

Section: Resultsmentioning

confidence: 99%

Section: Management Effectivenessmentioning

confidence: 99%

Section: Management Effectivenessmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Improving Catastrophe Modeling for Business Interruption Insurance Needs

Rose

Huyck

2016

Risk Analysis

View full text Add to dashboard Cite

show abstract

“…Current estimates of Hurricane Katrina are $90 billion in property damage and about $50 billion in business interruption (Swiss Re 2008). The economic impacts of the September 11 attacks on the World Trade Center have been estimated at $25 billion in property damage and $110 billion in business interruption (Grossi 2009). Many background considerations, disaster characteristics, individual behavioral responses, and workings of the macroeconomy affect economic consequences.…”

Section: Introductionmentioning

confidence: 99%

Economic Impacts of the ShakeOut Scenario

2011

View full text Add to dashboard Cite

For the ShakeOut Earthquake Scenario, we estimate $68 billion in direct and indirect business interruption (BI) and $11 billion in related costs in addition to the $113 billion in property damage in an eight-county Southern California region. The modeled conduits of shock to the economy are property damage and lifeline service outages that affect the economy's ability to produce. Property damage from fire is 50% greater than property damage from shaking because fire is more devastating. BI from water service disruption and fire each represent around one-third of total BI losses because of the long duration of service outage or long restoration and reconstruction periods. Total BI losses are 4.3% of annual gross output in the affected region, an impact far larger than most conventional economic recessions. These losses are still much lower than they potentially could be due to the resilience of the economy.

show abstract