Imagine that you run a software company and lease your office space in a 50-floor office tower. On Wednesday morning you arrive at work just after 9am and are informed that a neighboring business located 3 floors above your floor suffered a major broken pipe overnight resulting in 2 feet of water being deposited across your entire office floor.

Explain whose insurance, the landlords, the insurance of the firm located 3 floors above or your firms insurance would cover your damages and losses experienced in this event. Specifically, what potential and actual losses will your business have as a result of the pipe breaking and the resulting flooding? For each loss, whose insurance, if in force, will cover the loss?