Evaluating Utility Services Exclusions
from a record outbreak of tornadoes in April to a pre-Halloween snowstorm in the Northeast, 2011 saw its share of catastrophic weather events. The year also broke the record for billion-dollar disasters, a title previously held by 2008 with nine; 2011 brought twelve.
Usually, such disasters also result in localized or widespread power outages. Often,
insureds do not suffer any direct damage but experience losses solely because of power
outage or the resultant power surge when electricity is restored.
The latest editions of the ISO commercial property causes of loss forms contain utility
services exclusions that preclude coverage for power or other utility failure that is supplied to the premises. The exclusions apply if the failure occurs away from the described
premises or originates at the described premises but involves equipment used to supply
the utility service to the premises from a source away from the described premises.
All of the exclusions contained in Section
D of the Property Coverage Form apply
to this coverage form except:
b. Exclusion 1.i., Off Premises Utility
Services, is replaced by the following:
The interruption, failure or fluctuation
of power or other utility service(s) provided to the covered premises if the cause
of the interruption, failure or fluctuation
occurs outside a building at the plan
While typically forms exclude damage
because of power failure away from the