As businesses in the northeastern United States continue to recover from October's Superstorm Sandy, claims experts fear that business interruption claims will mean that insured losses will reach the high ends of current estimates.

With power and transportation disruptions still ongoing in some areas, some are already predicting claims disputes, particularly over policy language in contingent business interruption coverages or in the treatment of losses arising from storm surge or flood.

“Everyone's trying to get a handle on their BI and expecting the worst right now,” said David Finnis, executive vice president and national property practice leader at Willis North America Inc. in Atlanta. “A lot of the insurers are starting to see numbers that are popping their eyes out of their head.”

Citing modelers' various estimates of U.S. insured losses from Sandy — with Risk Management Solutions Inc.'s at the high end of the range with $20 billion to $25 billion — Mr. Finnis said losses will likely be closer to the high end of the range.

“Demand surge” also will drive up insured losses, he said, particularly as winter weather draws near. “You're playing beat the clock for some of these people before the real cold weather sets in. Some of these contractors can name their own price.”

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“The business interruption claims are going to be the real battles coming out of Sandy in terms of coverage,” said Alexander G. Henlin of the Edwards Wildman Palmer L.L.P. law firm in Boston. “It's going to be a challenging environment for anyone to deal with.”

Contingent business interruption and supply chain disruption claims also will be significant, Mr. Henlin said, and likely in the billions of dollars.

“New Jersey can't supply its liquor stores. A major warehouse that supplies the entire northern part of the state was destroyed by Hurricane Sandy,” Mr. Henlin said. “I would expect claims to come out of that.”

With disruptions persisting in some areas, many claims have yet to come in, even as losses continue to grow, Mr. Henlin said. “Any sort of time element coverage that's out there is tied to the period of restoration,” he said. For many affected by the storm “there's still an ongoing POR,” Mr. Henlin said. “You can't make the claim until the POR's over.”

Jay Cannon, assistant vice president and manager of SimZone at FM Global in Johnston, R.I., said power outages and transportation disruptions are causing much of the business interruption after Sandy.

Most businesses can't function without electricity, so shutdowns leading to business interruption claims are likely and, in cases where distribution centers are closed, it could have supply chain implications, he said.

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“The other part of that is the transportation network — shipping, trucking and rail. If any of those three transportation modes was impacted, then you're not moving goods from point A to point B,” Mr. Cannon said.

Retailers appear to be among the hardest hit by Sandy-related supply chain disruptions, Mr. Cannon said.

“Clearly there's going to be enormous business interruption losses, and I imagine that some of those are going to arise from damage or infrastructure damage that arises somewhere away from the insured's premises,” said Richard M. Mackowsky, a member of the Cozen O'Connor law firm in Philadelphia.

“Almost certainly you're going to have a whole range of issues under contingent business interruption coverage,” Mr. Mackowsky said. Depending on the type of CBI coverage, there might be such policy provisions as requirements that the dependent business be scheduled or requirements that suppliers or customers must be direct suppliers or customers. Many CBI coverages might require damage to property at the dependent business, often from a named peril.

“Many commercial policies do provide flood coverage, but many still do not provide flood coverage,” he said and, in the absence of flood coverage, the policyholder wouldn't be eligible for CBI coverage if the damage to the supplier was caused by flood.

Willis' Mr. Finnis said whether policies treat Sandy losses as the result of a named storm or storm surge and flood also will be a factor for some property insurance policyholders.

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“Some policies will treat this as a named storm and the deductibles and limits will be driven by that definition,” he said. Those deductibles tend to be low in the Northeast, he said. But other policies will treat the loss event as the result of storm surge and flood and apply flood deductibles and limits, with those deductibles typically higher in the area.

Thomas Varney, risk consulting manager Americas at Allianz Global Corporate & Specialty in Chicago, said that while the March 2011 earthquake and tsunami in Japan and last fall's floods in Thailand opened eyes to supply chain risks, Sandy's proximity will reinforce awareness of those risks.

It's important that businesses understand their supply chain risks and the risks facing their key suppliers, he said, and that they plan accordingly. “It's really doing the due diligence,” he said. “And when you're looking at things, make sure it's a living document. Keep it up to date.”

Matt Jadacki, an executive director at Ernst & Young L.L.P. who previously worked in emergency management capacities with the federal government, was less certain that the storm would change businesses approach to storm risk management. “There's a misconception out there that the federal government's going to come in and bail people out and bail businesses out,” he said.

While there are Federal Emergency Management Agency programs that will assist public entities with restoring facilities and infrastructure, there are no such programs for private entities, he said. And, even with those public entity programs, “There's a cost-sharing element there, too,” Mr. Jadacki said.