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ERCOT Business Interruption Lawsuits

Texas Supreme Court Justices Hear Case That Will Decide if ERCOT Will Remain Immune from Storm-Related Lawsuits



According to the National Review, the 2021 Texas storm has caused tremendous amounts of damage and will likely lead to the highest number of insurance claims caused by a single event in U.S. history. The 2021 ERCOT rolling blackouts ignited tens of thousands of potential business interruption claims throughout the state of Texas. A substantial portion of a company's losses caused by the power outages come from the loss of revenue. However, these damages are not limited to loss of revenue and could include commercial property damage, loss of sales, damage to electrical equipment, loss of customers, loss of profits, contract disputes, loss of access to offices, and much more.


Experts believe the total value of insurance claims filed for the 2021 Texas winter storm will exceed the total amount of Hurricane Harvey claims which exceeded $19 billion. The widespread and prolonged rolling power outages caused businesses to lose substantial amounts of money due to damage to commercial property, ruptured water pipes, collapsed roofs, business interruption due to damage to their property, impeded access to the property, and the loss of public utility services and power, as well as the extra costs businesses have incurred to continue with normal operations. The average size of a business interruption claim could easily surpass $1 million.



Businesses Files "Business Interruption Lawsuits" Against ERCOT Due to Rolling Power Outages in February 2021


According to the Texas Department of Insurance, business interruption insurance covers financial losses and lost profits when a business cannot conduct business because of property damage or direct physical loss caused by an event that is covered by the insurance policy. Thousands of businesses throughout Texas were unable to operate during the 2021 Texas power outage.


Business income insurance is designed to protect businesses by compensating the business with a part of the lost income a business experienced when the business has been temporarily shut down due to events listed in the business interruption insurance policy. The following are a few essential points to consider before making your claim:


  • Business insurance companies consider discontinued expenses.

  • Business income is typically defined as the business' potential gross profit or annual earnings.

  • Business income insurance does not cover property damage or repairs.

  • Business income insurance does not cover equipment damage or repairs.

  • "Potential" income lost is an estimate, and insurance companies try to low-ball or deny your claim. Legal action is often warranted at this time.


If your business suffered economic loss or damage due to the February 2021 power outages, and either your insurer has denied your claim or you did not have business interruption insurance, protect your company's finances by speaking with our business interruption attorneys.


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