Tax and Insurance Consequences of Major Disasters: Weathering the Storm

Abstract:     
An average of twenty-five catastrophes each year cause at least $25 million in direct insured damages. In 2006, there were thirty-three events of this major magnitude. In 2005, Hurricanes Katrina, Rita, and Wilma ravaged the United States as three of the seven most costly disasters in world history.

Those in the legal community may find themselves victimized by disaster. This article examines tax and insurance implications of disasters on law firms. It is part of a symposium edition at Nova Law School focusing on how emergencies impact law practice.

The article exposes gaps in insurance coverage found in policy exclusions which leave many holding the bag after a major disaster. Post-Katrina cases upholding flood damage exclusions are specifically examined. Recent, proposed, and pending legislation concerning federal emergency tax relief are also discussed.

Number of Pages in PDF File: 29

Keywords: tax, insurance, disaster, hurricane

JEL Classification: K34, K11, K23, K20, K30, H32, G22

Accepted Paper Series