The Impact of “Hurricane Hugo” on the Purchase of Indirect Loss Coverage

This study examines the business community of Charleston, South Carolina following Hurricane Hugo. The objectives of this study are (1) to determine if, after experiencing an actual catastrophe, a significant number of firms either purchased or increased Business Interruption and/or Extra Expense insurance limits, and (2) to compare generally the responses from Charleston, South Carolina, with the earlier responses from previous studies of areas which experienced catastrophes such as tornados and floods. Over 75 percent of the responding firms sustained hurricane damage, and more than 63 percent considered it moderate, heavy, or complete. More firms purchased or increased Business Interruption and/or Extra Expense insurance limits insurance after the storm. Results are compared with previous studies.