The volcanic ash cloud that disrupted air travel, snarled supply chains and forced event cancellations in Europe has risk managers poring over their insurance policies to determine what, if any, losses are covered.

Business interruption losses because of disruptions spawned by the ash cloud that covered much of Europe for several days likely are uninsured, experts said.

But claims filed under abandonment and cancellation coverage, supply chain insurance and travel policies could provide payments to policyholders affected by the ash cloud, sources said.

Risk managers' problems began this month when Iceland's Eyjafjallajökull spewed an ash cloud that drifted over much of Europe, leading governments to ground air traffic for several days and causing a ripple effect of mostly uninsured losses around the world.

Airlines were hit the worst by the disruption, but experts say they are the least likely to have insurance to cover their lost revenue, which the International Air Transport Assn. estimated at more than $1.7 billion as of the middle of last week.

Most airlines and other businesses with losses stemming from the disruption of air travel will not be able to rely on business interruption insurance to recover those amounts, experts say, because those policies generally are triggered only when physical damage leads to a loss of revenue.

After meeting with risk managers late last week, Richard Latham, chairman of the travel special interest group at the London-based Assn. of Insurance & Risk Managers said, “The feeling is now that there is virtually no cover” for losses under business interruption policies.

Material damage has to be present to give rise to a business interruption claim, regardless of whether the loss is from canceled flights or nondelivery of parts, said a spokesman for Allianz Global Corporate & Specialty A.G. in Munich. “When an authority closes an airport to prevent losses in the interest of safety, this is not covered. This is something our clients know. We have had no calls to ask if this is covered,” he said.

A spokesman for Aon Aviation, a unit of Aon Ltd., said “even if specific coverage was offered by the insurance markets, it is likely to have been prohibitively expensive.”

Airlines' losses are not from a regulatory action, but rather a natural act that led governments to shut down airspace, the Allianz spokesman said. “There may be an individual policy where the wording is unstable enough to be an issue, but, as a rule,” there will not be coverage, he said.

Policyholders are not likely to be as aggressive in pursuing business interruption claims as were those after the 2001 terrorist attack that destroyed the World Trade Center in New York, sources said. In Europe, experts said the ash-caused grounding lasted longer than the air traffic halt ordered following the 2001 attacks.

“To be honest, it's relatively clear in this instance whether the policy will react or not,” said Caroline Woolley, London-based property practice leader for Europe, the Middle East and Africa at Marsh Ltd. “We won't have the same level of dispute because the wording is quite clear.”

Deutsche Lufthansa A.G. is an airline that believes wording in its policies clearly states that no coverage is available because there was no physical damage to trigger it, said a spokesman for the company's Cologne, Germany-based insurance group, Delvag Luftfahrtversicherungs A.G.

John Dempsey, managing partner of forensic accounting and claims-related service provider Dempsey Partners L.L.C. in Wilton, Conn., pointed out that arguing for business interruption coverage won't be easy under wording that has changed since the 2001 terrorist attacks.

Policy wording on “indirect coverage” written prior to the attacks generally covered losses when access to property was impaired by an action by civil or military authorities issued in connection with an insured peril, Mr. Dempsey said. Under common wordings now, however, the trigger changes from the insured peril to physical damage, he said.

“Ten years ago it might have been different,” Mr. Dempsey said of policyholders' chances in arguing a claim. But even under the previous wording, “it still would be a very tough claim to recover.”

Risk managers, though, should not assume their coverage won't respond, advised John Ellison, a partner with law firm Reed Smith L.L.P. in Philadelphia. “There are definitely forms that don't tie civil authority and ingress/egress coverage to physical damage as clearly as others do,” he said.

“I'm not saying they are the majority, but I absolutely have seen policies that don't contain” language that would limit the coverage in that way, Mr. Ellison said. It's “not a major undertaking,” he said of examining coverage language. “Anyone who knows the field can hone in on that quickly.”

Risk managers in the United Kingdom were taking an aggressive stance against travel insurers that refuse claims, Mr. Latham said (see story). Travel insurers in the United Kingdom traditionally have shown an unwillingness to pay claims and policyholders argue their losses should be covered in this case, he said.

Coverage written to pay claims related to supply chain disruptions generally includes business interruption losses, but also carries the same physical damage stipulation, Ms. Woolley said.

A product that Marsh developed last year, Global Supply Secure, will provide coverage for losses due to a supply chain disruption even if there is no physical damage, she said.

Marsh declined to comment on whether ash cloud claims have been filed under the program.

Policyholders may have a difficult time recovering under business interruption policies, but those who bought coverage against cancellation of events are finding their insurance will respond.

Travel disruption caused by the volcanic ash cloud meant some conferences were canceled or scaled back, said David Bruce, head of specialty underwriting at Hiscox Ltd.'s syndicate 33 at Lloyd's of London.

“There could be some very big losses in this market,” he said.

Hiscox has received cancellation and abandonment claims related to disruptions caused by the volcano, Mr. Bruce said, but he declined to provide specifics.