Bi- Economy Market Inc V. Harleysville Insurance Company Of New York

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Bi-Economy Market Inc V. Harleysville Insurance Company Of New York

Bi-Economy Market Inc V. Harleysville Insurance Company Of New York

Thetussle between the meat company and its insurer brings in a newdimension in insurance compensation claims. Any court dealing withsuch a matter ought to address the issue of consequential damages andthe extent to which these damages can be sought.

Bi-Economy argues that the time that they entered into an agreement, theinsurer knew that in the case of an eventuality like fire, thecompany would go out of business if not adequately and promptlycompensated. Harleysville on the other hand, argues that this was notthe case as the insurance covered the building, inventory and loss ofincome as agreed.

Thereis the need to look into what happened after the occurrence of thefire. The insurance company decided to compensate Bi-Economy MarketInc. with a sum of $163,000. However, an arbitrator awarded the meatcompany $407,000. The claim that the slow response by the insurancecompany is what led to the permanent destruction of business isneither here nor there.

Inthe usual course of business, during the time of negotiations,parties agree on the terms of the contract. During the deliberationson the cover in case of destruction by fire, the meat company oughtto have put it out that they also contemplated the insurance to coverdamages for termination of business. The premium in this case wouldalso have been higher.

Itis not foreseeable that a fire would lead a company out of businessand if the meat company foresaw such an incidence, the contract wouldhave included this. This would open a floodgate of litigation withmany companies using this avenue to claim damages and fail to dotheir part when negotiating contracts. However, the insurance companyought to have been diligent in doing their part of the bargain bypaying promptly. The meat company can be awarded damages to thiseffect but not consequential damages for permanent destruction ofbusiness.


Dobbyn,J., &amp French, C. (2015). InsuranceLaw in a Nutshell.West Academic.