Last week, FDA released a statement about the challenges facing the medical device manufacturing industry in Puerto Rico in the wake of Hurricanes Irma and Maria. FDA is concerned that the damage to the island will lead to shortages of important medical products. The statement highlights that device manufacturers both inside and outside Puerto Rico may face serious supply-chain disruptions. These disruptions could result in substantial losses for device manufacturers.

Commercial property insurance policies typically provide a variety of coverages that may help protect policyholders from these losses. Most policyholders know that commercial property policies cover business-interruption losses resulting from physical damage to their covered property. But some may not appreciate that property insurance policies often also cover:

  • Losses resulting from damage to suppliers (or customers);
  • Losses resulting from damage to service providers (such as power and internet);
  • Losses resulting from an inability to access otherwise undamaged locations (for instance, increased transportation costs resulting from shut downs at ports or diesel fuel shortages); and
  • Losses resulting from government orders that prohibit access to insured locations.

A full discussion of the different coverages that policyholders should consider as potential sources of recovery, as well as practical tips for post-loss recovery, is available in our recent Covington alert, which may be accessed here.