The seemingly daily barrage of climate-related disasters has compelled insureds and insurers alike to scrutinize property insurance policy language and the law for guidance on the extent to which loss is covered and what perils are excluded or subject to a sublimit—that is, a lower limit for certain losses than the overall policy limit. While insureds regularly turn to their property insurance policies to cover physical damage to their property after a climate-related disaster, physical damage is not the only type of loss that insureds face. Insureds can also incur economic loss over a period of time because they are unable to conduct business as usual. These losses may by covered by “time element” provisions in property insurance policies. Given the continued climate concerns and recent case law, insureds are well served to understand the potential interplay between sublimits and time element coverages.
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