Lost business opportunities after Hurricane Katrina hit was the issue before the court in Safeguard Storage, Properties, L.L.C. v. Donahue Favret Contractors, Inc., 2011 La. App. LEXIS 391 (La. Ct. App. March 31, 2011).

   Safeguard planned to develop a minimum of twelve to fifteen new self-storage locations each year for several years.  Market evaluations were performed for five different metropolitan locations.  Nineteen new projects were being developed when Hurricane Katrina struck. 

   The hurricane damaged Safeguard's New Orleans area facilities and interrupted the business operations of Safeguard's corporate office and national call center.  Safeguard's office space sustained $30 million in damages. 

   Safeguard sued its insurers, seeking compensation for its damaged property and for lost business opportunities at locations Safeguard was allegedly unable to open due to Hurricane Katrina.  The insurers filed motions for partial summary judgment asserting that Safeguard's lost business opportunities claims for forty years of profits from 36 stores that would have allegedly been built but for Hurricane Katrina were too speculative as a matter of law.  The trial court agreed and granted summary judgment.

   The policies provided that business losses would be adjusted on the basis of actual loss sustained by the insured resulting from interruption of business, "consisting of the net profit which is thereby prevented from being earned."  To determine the amount of loss sustained, consideration was to be given to the experience of the business before the date of damage and to the probable experience had no loss occurred.

   On appeal, the court could not determine as a matter of law that a portion of Safeguard's claims for loss business opportunities was not covered under these provisions.  A projection of earnings was an accepted method of calculating business interruption.  Safeguard contended it developed thirty-eight new storage facilities from 2001 to 2005.  It sustained lost business income due to its alleged inability to build thirty-seven new storage facilities.  A Safeguard expert stated that a conservative estimate for Safeguard's lost business opportunities was $332.5 million.  Whether these estimates were credible was a determination to be made by the finder of fact.  Therefore, the trial court erred in granting the insurers' motion for summary judgment.