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Does a Windstorm Deductible Apply to My Spoiled Cheesecakes?

Release Date: 05/13/2025

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More Episodes

A windstorm-caused power outage at the Cheesecake Manufactory led to the spoilage of hundreds of cheesecakes and a business income loss. The adjuster is questioning if the windstorm deductible applies to the claim, despite the power outage being the direct cause of the spoilage.

Notable Timestamps

[ 00:00 ] - The scenario presented involves a windstorm that caused a power outage, leading to spoiled cheesecakes and a claim for spoilage and lost business income, raising the central question of whether the windstorm deductible applies given the chain of events.

[ 01:30 ] - Trivia: Where did the maximum natural wind gust ever recorded occur?

[ 03:00 ] - The windstorm deductible endorsement states it applies to losses "caused directly or indirectly by windstorm or hail", but this language, even with "indirectly," can still lead courts to perform a proximate cause analysis, often leaving the "dominant and efficient cause" determination to a jury, unlike clearer anti-concurrent causation language.

[ 04:30 ] - While "directly or indirectly" might address some indirect causation issues, the very definition of "windstorm" is not straightforward and is heavily subject to interpretation by courts based on specific case facts.

[ 06:00 ] - Case law interpretations of "windstorm" can be narrow, such as a Rhode Island case finding high winds didn't qualify due to excessive rain; or surprising, like a Texas court holding a tornado was not a windstorm for deductible purposes.

[ 07:30 ] - Is a tornado the epitome of a windstorm? Depends on who you ask...

[ 09:00 ] - When two different endorsement provisions contain irreconcilable conflicts, such as both stating that "no other deductible applies" to the coverage they provide, a court might determine that no deductible applies at all.

[ 12:00 ] - The business income claim follows a chain of events from the windstorm to the power outage and then the spoilage. The business income loss specifically results from the inability to operate due to the spoiled inventory, which might also involve potential Extra Expense.

[ 13:30 ] - Brennan provides a recap of the scenario and the points above.

Your PLRB Resources

PLRB Catastrophe Services Launches New Power Outage Reports - https://www.plrb.org/documents/plrb-catastrophe-services-launches-new-power-outage-reports/?search=power%20outage%202025

Turner Construction Co. v. ACE Prop. & Cas. Ins. Co., No. 04-4451-CV, 2005 WL 2837575, — F.3d — (2d Cir. 10/28/05) (applying Texas law) reviewed at PLRB, Prop. Ins. L. Rev. 6978 (2005)

Windstorm Deductible – Food Spoilage – BI – PCQ.2024.07.26.twh.a - https://www.plrb.org/documents/windstorm-deductible-food-spoilage-bi-pcq-2024-07-26-twh-a/?search=power%20outage%202024

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The views and opinions expressed in this resource are those of the individual speaker and not necessarily those of the Property & Liability Resource Bureau (PLRB), its membership, or any organization with which the presenter is employed or affiliated. The information, ideas, and opinions are presented as information only and not as legal advice or offers of representation. Individual policy language and state laws vary, and listeners should rely on guidance from their companies and counsel as appropriate.

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