Commercial Property Insurance Claim
The Effect of Sale of a Commercial Property on a Pending Insurance Claim
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This issue of Adjusting Today tackles the complications that arise during the sale of a commercial property while a property insurance claim is pending. What happens when, at the sale date, either physical repairs are not yet complete or the business interruption period is still in progress? Gary Thompson* advises us on insurance recovery for uncompleted repairs and business interruption for the “theoretical” period past the sale date.
By Gary Thompson
Hurricanes Katrina, Rita, and Wilma were among the most damaging storms in history. There are still hundreds of pending commercial property insurance claims from these hurricanes, winding their way towards resolution. Future hurricane seasons are expected to be punishing and could produce hundreds more commercial property insurance claims.
At the same time, there is a tremendously active market in the sale and purchase of commercial properties, especially income producing properties like hotels. Sellers and purchasers of commercial properties have confronted, or may confront, the issue of what happens to an insurance claim when a commercial property is sold.