This document discusses various issues relating to insurance coverage and climate change impacts like drought. It examines concepts like when an "occurrence" is considered to happen for insurance purposes during a drought. For example, is it when a prediction of drought is made, when structures start cracking from heat, or when a certain percentage of fish die off? It also looks at property damage definitions and whether loss of use would be covered under commercial general liability policies. Overall, the document analyzes the complex insurance implications of climate change impacts that will become more severe, like higher temperatures and more frequent droughts.

1. Itzchak Kornfeld
Faculty of Law, The Hebrew University of Jerusalem
Kornfeld.itzchak@mail.huji.ac.il
Boston College Who Will Pay: The Public & Private
Insurance Implications of Climate Change's Drastic
Challenges. 11/5/2015
DROUGHT & LOSS OF USE
INSURANCE COVERAGE

2. CHARITY HOSPITAL,
NEW ORLEANS POST-KATRINA

3. CHARITY HOSPITAL
NEW ORLEANS POST-KATRINA

4. COUNT/TENET OFFICE
BUILDING

5. INSIDE CHARITY HOSPITAL
NEW ORLEANS POST-KATRINA

6. ● Loss of Use Coverage
● Business Interruption
Coverage

7. DROUGHT IS
NOT INSURABLE!

8. THE EFFECTS OF DROUGHT
MAY BE

9. THE EFFECTS OF DROUGHT

10. THE EFFECTS OF DROUGHT

11. CLIMATE CHANGE & INSURANCE
By 2100 temperatures will increase by
at least 10 degrees
Severe heat will cause “occurrences”
of property damage to real and
tangible property. More often than
not that tangible property will be
crops, fruit trees and livestock.

12. CGL PROPERTY DAMAGE
DEFINITION
a) Physical injury to tangible
property, including all resulting
loss of use of that property. All
such loss of use shall be deemed
to occur at the time of the
physical injury that caused it; or

13. CGL PROPERTY DAMAGE
DEFINITION
b) Loss of use that is not
physically injured. All such
loss of use shall be deemed to
occur at the time of the
“occurrence” that caused it.

14. CGL OR “OCCURRENCE”
BASED POLICIES
"Bodily injury" or "property damage"
will be deemed to have been known to
have occurred at the earliest time
when any insured listed under
Paragraph 1. of Section II – Who Is An
Insured or any "employee" authorized
by you to give or receive notice of an
"occurrence" or claim:

15. 2004 CGL POLICY LANGUAGE RE: WHAT INSURED
KNEW AND WHEN THE INSURED KNEW IT
:
b. This insurance applies to “bodily
injury” and “property damage” only if:
(1) The “bodily injury” or property
damage” is caused by an
“occurrence” that takes place in the
“coverage territory”;(2) The “bodily
injury” or “property damage” occurs
during the period

16. 2004 CGL POLICY LANGUAGE RE: WHAT INSURED
KNEW AND WHEN THE INSURED KNEW IT
The "occurrence" CGL is
triggered when the bodily
injury or property damage is
deemed to have occurred.

17. BUT IN A DROUGHT WHEN IS THE
OCCURRENCE?
At time of Prediction/Forecast?
At time of prediction of drought?
At time when a structure, e.g., a hot house, begins to
crack from the heat or when it is totally destroyed?

18. ECHO BAY: LAKE MEAD'S ECHO BAY
MARINA LIES ABANDONED IN MUD
ABOVE THE WATER LINE

19. AT TIME WHEN WATER OF A LAKE PARTIALLY DRIES
UP OR TOTALLY, SO BOAT RENTERS CAN’T ROW?

20. HIGH AND DRY: THE LAKE PALACE IN UDAIPUR,
INDIA, IS SURROUNDED BY MUD AFTER THE WATER
DRIED UP DUE TO DROUGHT

21. WHEN IS THE OCCURRENCE? AT TIME THE
GOVERNMENT SHUTS DOWN WATER?
OR WHEN % OF FISH DIE?