On Saturday October 12, 2019, several decks of upper floors of the Hard Rock Hotel & Casino under construction just off Canal Street in New Orleans suddenly collapsed. As emergency personnel were engaged in the immediate efforts to rescue and aid the crews working at the hotel site, the City of New Orleans was busy implementing its emergency response teams.

WVUE news reported on October 13, 2019:

Electricity has been cut off to at least 10 other properties near the scene. The city is asking anyone who may work in the area of the construction site to please make a plan as to how you will get around road closures. They are also asking employers to be understanding that some workers could be delayed or may not be able to get to work at all.

No-entry and evacuation areas remain in place. The no-entry zone is bounded by Conti Street to Common Street and Basin Street to Dauphine Street. The evacuation zone is bounded by Bienville to Canal and Basin to Burgundy.

The Saenger Theatre did sustain damage to its roof. All remaining performances of Wicked have been cancelled through Oct. 20.

The New Orleans Athletic Club also sustained roof damage.

Within a couple of days, the evacuation zone had been extended due to the extreme danger and instability of the remaining structure and towering cranes. WDSU news provided the following update:

Evacuation zone extended as both cranes at Hard Rock site could Collapse Updated: 10:29 AM CDT Oct 15, 2019

The evacuation area now includes the buildings on the Uptown side of Canal Street from Elk Place to Burgundy Street. The entire evacuation area is the Uptown side of Bienville, river side of Basin, Uptown side of Canal and lake side of Burgundy. If you are in this area, evacuate immediately.

Business owners and residents were, and are still, faced with a very dangerous set of unknowns. Services such as electricity, gas, water, and sewer also were shut off in the evacuation zone. Though some no-entry zones and closed roads are now open, and the evacuation zone has decreased, there are still shutdowns and major economic and personal impacts to the citizens of New Orleans.

Time element coverages are typically related to business and the loss is measured by a period of time. Even from the initial reports cited above, several potential time element coverages could be triggered. Depending on the specific language of the policy, an affected business owner may find coverage for this unexpected loss under some common time element coverages: Business Interruption; Extra Expense; Service/Utility Interruption; Ingress/Egress; and/or Civil Authority.

It is important to read the policy carefully to determine if one or more of the time element coverages may apply to provide coverage. Many business policies are manuscript policies, which do not necessarily follow Insurance Services Office (ISO) form or standard policy form. The following is an excerpt from a Businessowners Policy providing Civil Authority Coverage:

Civil Authority

When a Covered Cause of Loss causes damage to property other than property at the described premises, we will pay for the actual loss of Business Income you sustain and necessary Extra Expense caused by action of civil authority that prohibits access to the described premises provided that both of the following apply:

(1) Access to the area immediately surrounding the damaged property is prohibited by civil authority as a result of the damage, and the described premises are within that area but are not more than one mile from the damaged property; and

(2) The action of civil authority is taken in response to dangerous physical conditions resulting from the damage or continuation of the Covered Cause of Loss that caused the damage, or the action is taken to enable a civil authority to have unimpeded access to the damaged property.

Civil Authority coverage for Business Income will begin 72 hours after the time of the first action of civil authority that prohibits access to the described premises and will apply for a period of up to four consecutive weeks from the date on which such coverage began.

Civil Authority coverage for necessary Extra Expense will begin immediately after the time of the first action of civil authority that prohibits access to the described premises and will end:

(1) Four consecutive weeks after the date of that action; or

(2) When your Civil Authority coverage for Business Income ends;
whichever is later.

The definitions of Business Income and Extra Expense contained in the Business Income and Extra Expense Additional Coverages also apply to this Civil Authority Additional Coverage. The Civil Authority Additional Coverage is not subject to the limits of Insurance of Section 1 – Property.

Policies differ in coverage areas and additional coverages available, and vary dramatically in the “waiting period” and proximity to the damage. It will be important to obtain the entire policy, which includes endorsements, to determine whether your policy contains applicable time element coverage. Our thoughts and prayers go out to those who have suffered loss of loved ones and the many who have been impacted by this horrific tragedy.