Business interruption insurance is meant to compensate you for the revenue lost when a catastrophe or other event forces you to close your business.
Examples of events that qualify you for business interruption coverage includes:
The aim of business interruption insurance is to help you preserve your business when you are unable to continue normal operations.
There are numerous factors, expenses, and revenue streams that need to be considered when making a business interruption claim.
Our attorneys assist businesses in all stages of a business interruption claim – from making the claim to litigating disputes with their insurer.
What Is Covered for Business Interruption?
- Income your business has lost due to being closed.
- Rent that you lost because your property could not be used.
- Employee wages.
- Relocation expenses to move to a temporary location including additional rent incurred to continue business operations.
- Loan payments.
- Business taxes.
- Civil Authority: Loss incurred when a governmental authority restricts access to your business.
What Do I Need to Make a Business Interruption Claim?
At the outset, you should gather your most recent income reports, expense reports, and employee information to make a business interruption claim.
It is not uncommon for insurance companies to review numerous other documents during the adjustment of your claim.
At the most basic level, business interruption coverage is comprised of your business income and other.
Different Types of Coverage?
Extended Business Interruption Coverage
Most business interruption policies provide coverage until damage property is restored. Extended coverage continues to provide coverage until your business has returned to pre-loss income levels.
Contingent Business Interruption Coverage
This provides coverage for losses associated with losses caused by disruptions from suppliers your business relies on. If your business relies on other businesses, this
Civil Authority Coverage
Commercial policies tend to include business loss coverage caused when a governmental authority has forced the business to close due to a catastrophe.
Civil authority coverage tends to be tied to the presence of some form of physical loss to the property.
Typical Business Interruption Exclusions
- Undocumented Income. This exclusion is obvious. You need to be able to document your income to establish entitled to payment.
- Utilities. Often times, utilities are closed following a catastrophic loss. Insurance companies expect the insured to turn off utility service to mitigate damages.
- Lack of Physical Damage: Many policies include exclusions that limit coverage to where a property was physically damaged.
- Partial closure losses. Some policies will not provide coverage where only a portion of the business has been closed.
- Cause of closure not covered. Most policies require a covered peril
- Power outages. Many policies will not cover losses due to downed powerlines because power outages are considered common and do not normally last long.
What to Do If Your Business Interruption Claim is Delayed, Denied, or Underpaid?
You have sacrificed for your business and you should not permit a catastrophic loss to prevent you from pursuing your dreams.
If your business interruption claim has been delayed, denied, or underpaid, be aware that you have rights as a policyholder.