Often the provision also provides that the physical loss or damage must trigger the loss of access, but this is not always the case.It is instructive to analyze cases where the absence or presence of “physical loss or damage” has made a difference in coverage. InFountain Powerboat Indus. v. Reliance Ins. Co., 119 F. Supp. 2d 552, 554 (E.D.N.C. 2000), a hurricane struck eastern North Carolina, causing devastating flooding on the only road to the insured’s headquarters. The headquarters, however, were not damaged by the hurricane or flooding, so there was no physical loss or damage to the insured’s property.
An often hotly contested issue is whether or not access to the property was completely or only partially restricted. See Fountain Powerboat Indus., Inc. v. Reliance Ins. Co., 119 F. Supp. 2d 552, 557 (E.D.N.C. 2000) (holding that ingress/egress coverage applied to income a boat manufacturer lost when Hurricane Floyd flooded roads, partially limiting access to the insured’s facility). Similarly, civil authority coverage applies when, as a result of a covered cause of loss, a government order restricts access to the insured’s location.
The “time deductible,” as it is sometimes referred to, may prevent the trigger of any payment, even where there is coverage. In Fountain Powerboat Industries, Inc. v. Reliance Ins. Co., 119 F.Supp2d 552 (E.D. North Carolina) the United States District Court for the Eastern District of North Carolina was called on to interpret coverage for loss of ingress or egress. Id.
Additionally, and as a result, ingress/egress policy language tends to be less standardized than other forms of business interruption coverage. As an example, an ingress/egress provision may read:This policy covers loss sustained during the period of time when, as a direct result of a peril not excluded, ingress to or egress from real and personal property not excluded hereunder is thereby prevented.An often-cited case addressing an ingress/egress provision like the one above is Fountain Powerboat Indus., Inc. v. Reliance Ins. Co., 119 F.Supp.2d 552 (E.D.N.C.2000). In Fountain, the district court was faced with determining whether recovery under this ingress/egress provision required property damage to trigger coverage.
This type of coverage is triggered when, for example, flooding renders the only road leading to the insured’s manufacturing plant nearly impassable. See, e.g., Fountain Powerboat Indus., Inc. v. Reliance Ins. Co., 119 F. Supp. 2d 552, 554, 556-57 (E.D.N.C. 2000). Coverage questions implicating this type of coverage may arise if an insured believes the I-85 closure has prevented or impaired access to its business and caused a loss of business income.