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When Disaster Strikes, That's Just the Beginning

LOS ANGELES-While normally lengthy and detailed, insurance provisions actually do not—and probably could not—deal well with several real-world issues that can erupt when a serious casualty strikes, says Manatt, Phelps & Phillips' Tom Muller in this EXCLUSIVE commentary.

By Tom Muller, co-chair of the land use and real estate practice at Manatt, Phelps & Phillips LLP | Updated on August 15, 2013

LOS ANGELES-When was the last time you read a really interesting insurance provision in a loan agreement? Unless you’re one of those brave people who writes insurance for a living, the answer to the question is either (a) never, or, if you’ve ever had the misfortune to suffer a serious casualty to your real property, (b) about two days after the casualty.

These dry and fairly standardized provisions typically cover the types of insurance required to be carried, extension of the coverage to the lender, waiver of the rights of the parties and their insurers to sue the other parties, and provisions giving the lender the right to control the insurance proceeds if there is an insured casualty.

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