Business Continuity Insurance Claims from Japanese Earthquake Revelations

Original estimates for claims for business interruption resulting from the Japanese earthquake and nuclear disaster ranged from a low of 5 billion to a high of 15 billion.

The insurance industry now says claims will be around the 5 billion mark, as they did not have to pay on some of the biggest claims, like Apple Computers who claimed $500 million.  Why did they not have to pay?  Why did Apple claim such a large amount?

Apple was set to launch the IPad2 in the 3 weeks that followed the earthquake, they had business interruption insurance as many of the critical parts needed to fulfill the orders for the Ipad were made in Japan.

Much of their claim was denied though, because parts could also be made at other manufacturers...but most interesting was one critical part was made at a factory that was in the evacuation zone of the nuclear reactor, so the part could not be made.  Why were they not covered for this?

The insurer says that the supplier was not "physically" damaged by the earthquake, they were just made to evacuate, and the policy did not cover that apparently.

You should work very closely with your insurance broker to see, including the fine print, what sort of scenario's are and are not covered by your policy if you have one.  (P.S. get it in writing).

You can read more about it in this insurance industry article here.