The Perfect Storm: How Climate Change Claims Are Drowning Long Island Businesses in Insurance Coverage Litigation
Long Island businesses are facing an unprecedented crisis as climate-related insurance disputes surge to historic levels in 2025. The latest data from Lex Machina indicates that 2025 is continuing the upward trend. The bulk of recent business interruption lawsuits stems from weather and climate-related damage, such as flooding, hurricane-force winds, hail, and wildfires. This explosion of litigation is fundamentally reshaping the commercial legal landscape across Nassau and Suffolk Counties.
The Scale of the Crisis
After years of relative stability, disputes over business liability coverage have risen steeply since 2021. Federal courts saw more than 3,000 such cases filed in 2024, marking the busiest year since 2010. For Long Island businesses, this trend is particularly alarming given the region’s vulnerability to extreme weather events and rising sea levels.
The number of National Flood Insurance Program policies in New York has remained flat, at about 169,000, but some insurers left the South Shore of Long Island for good. (In places like Long Beach, 90% of properties are at risk of flooding, according to a Federal Reserve Bank of New York report.) This insurance market withdrawal has left many businesses scrambling for coverage while facing increasingly complex policy language and exclusions.
The New Reality of Climate Litigation
In recent years, climate change litigation has begun to impact an increasingly diverse range of businesses and their directors and officers. This trend has been highlighted in The Grantham Research Institute’s 2025 Report on Global Trends in Climate Change Litigation, which underscores the growing legal challenges.
The scope of potential defendants has expanded dramatically. Potential targets are not confined to traditional sectors, like energy and fossil fuels, but now include companies in the animal agriculture, food, retail, and professional services sectors. Moreover, claims are not just based on tortious liability and human rights violations but also rely on new statutory mechanisms.
Insurance Coverage Disputes Intensify
The convergence of climate change impacts and insurance coverage disputes is creating a perfect storm for Long Island businesses. More and more companies are being called to defend against liability for what are known as emerging risks. Emerging risks are new, uncertain, and evolving sources of liability that lack any historical precedent and whose potential harm or loss is unknown. These are risks that surfaced suddenly that no one predicted and that insurers did not factor into their underwriting or their policy language.
Business interruption claims have become particularly contentious. Although mandated business closures from early pandemic years have long passed, new lawsuits concerning business interruption coverage remain frequent. More than 650 such cases were filed in 2024, which is over 50% higher than in any pre-pandemic year in the preceding decade. The focus has shifted from COVID-19 disputes to climate-driven issues, creating new legal battlegrounds.
Long Island’s Unique Vulnerabilities
Long Islanders are beginning to see the tangible costs of climate change in the form of rising insurance costs. The region faces multiple climate-related threats that directly impact business operations and insurance coverage:
- Coastal flooding and storm surge damage
- Extreme weather events becoming more frequent and severe
- Sea-level rise affecting waterfront properties
- Infrastructure strain from increased precipitation
Commercial enterprises, especially those located on the South Shore of Long Island, require Coastal Business Property Insurance, a stand-alone policy that covers the risks associated with their location, such as hurricanes, windstorms, flooding and erosion. Such coverages are generally excluded or undercovered by most commercial property insurance policies due to the higher risks involved.
The Legal Complexity Challenge
The intersection of climate science, insurance law, and commercial litigation has created unprecedented legal complexity. The high success of these claims and the related financial penalties against insured corporates are a key line of exposure for insurers. Claims and enforcement actions could trigger insurance claims under Directors & Officers and General Liability insurance policies.
Businesses need sophisticated legal representation to navigate these challenges. A skilled commercial litigation attorney long island can help companies understand their coverage, defend against unfounded claims, and pursue legitimate insurance recoveries when carriers wrongfully deny coverage.
Preparing for the Future
As climate-related litigation continues to evolve, Long Island businesses must take proactive steps to protect themselves. This includes reviewing insurance policies for climate-related exclusions, documenting business interruption losses properly, and working with experienced legal counsel who understand both commercial litigation and insurance coverage law.
Climate-related litigation is increasing and insurers are under public pressure for providing coverage to carbon-intensive fossil fuel companies under suit. Carriers also are facing legal action for denying litigation expense claims in climate-related cases. This creates opportunities for businesses to challenge improper claim denials while also requiring careful navigation of evolving legal standards.
The Path Forward
The insurance coverage litigation crisis facing Long Island businesses is not temporary—it represents a fundamental shift in how climate risks intersect with commercial law. Today’s coverage litigation reflects a complex convergence of social, environmental, and technological factors that extend beyond widely reported triggers like hurricanes and pandemics.
Businesses that proactively address these challenges through comprehensive risk assessment, appropriate insurance coverage, and experienced legal representation will be better positioned to weather this storm. Those that wait may find themselves overwhelmed by the rising tide of climate-related litigation that shows no signs of receding.
The Frank Law Firm P.C., with its deep understanding of Suffolk County’s unique legal landscape and commitment to client-centered service, stands ready to help Long Island businesses navigate these complex insurance coverage disputes. As the climate litigation crisis continues to evolve, having experienced legal counsel who understands both the local market and the broader trends shaping commercial litigation becomes increasingly essential for business survival and success.