There are many natural disasters that wreak havoc on business owners; such was the case last year when Hurricane Sandy caused significant business interruption losses for thousands of businesses. When catastrophes like hurricanes cause an interruption in business, business owners have to turn to their commercial insurance policies for coverage. This is why it is critical for business owners to have business interruption coverage—the key to their rebuilding effort, as it covers the loss of profits and expenses required to repair damages.
When business owners suffer property damages or a loss of business income due to a catastrophe, they need to know what their policy says about business interruption insurance and how to prepare their claims for business interruption losses. As commercial insurance claim attorneys, we have compiled a list to use when preparing a business interruption claim.
- Report the loss. Contact your insurance company as soon as possible.
- Review your policy to determine your coverages. Some business interruption coverage could include:
- Business income coverage – this insurance replaces the income that the business normally would have earned but lost due to the interruption. This income would include payroll, normal operating expenses, and the net profit before taxes.
- Extra expense coverage – this coverage pays for a temporary move to another location and reasonable and necessary expenses to keep the business running while the property is being restored.
- Contingent business interruption coverage – this covers a loss of income due to property damage at a customer location or key supplier.
- Civil authority coverage – when the government denies access to a location that your business is in, this insurance covers your loss of business income.
- Review your conditions and limitations. This section of your insurance policy is critical to examine and understand, as your policy may give you a specific time period for notifying the insurance company of the loss and providing proof of the loss of income and extra expenses.
- Calculate your business interruption loss. By reviewing all aspects of your business operations, you can determine what has been affected, if profits are affected totally or partially, how long production may be down, and the impact of the damage.
- Speak with an insurance claim litigation attorney. Generally, when you get to the last point, business owners want to ensure they are calculating their business interruption losses accurately so they don’t get short-changed. An experienced lawyer can make sure you are accounting for clean-up, demolition, payroll impacts, cancelled contracts, and all other losses. You can reach a skilled insurance attorney at the Voss Law Firm at 888-614-7730 today.