Biloxi Insured By Lloyd's Of London For Casino Income Loss
JACKSON, Mississippi (AP)--The city of Biloxi, Mississippi, home to a dozen floating casinos smashed by Hurricane Katrina, took a gamble that paid off.
Two months before the storm struck Aug. 29, the coastal town of 50,000 secured an insurance policy against a catastrophic event like a hurricane disrupting its stream of gambling revenue.
At the mayor's suggestion, Biloxi spent $92,000 on a "business interruption" policy that pays out $10 million.
"He is going to be looked on as a genius for that," a city spokesman said.
Casino proceeds account for about a third of Biloxi's budget. The $10 million policy will cover about six months of lost revenue.
After Katrina's wrath, Biloxi needs the insurance money just to keep afloat.
"Right now, money is going out three times faster than on a normal day because we have so many people working so many hours and we have absolutely nothing coming in," Creel said.
The policy was underwritten by Lloyd's of London (LYL.YY), which has estimated its Katrina losses at $2.55 billion - its second-biggest loss ever.