Business Interruption Claim
Insurance coverage in the case of business interruption is intended for multiple reasons. Business interruption insurance promises to compensate the insured for the income that was lost during the time period of interruption out of the business’ control, such as a disaster. Extended business interruption is typically limited to a period of time. In the event of extended business interruption, there is coverage for the income that is lost after the property is repaired but before the income returns to the pre-loss level. Contingent business interruption provides the insured with coverage, not to its personal business property, but to the property of suppliers or consumers of its product or services.
The latter two business interruption options are commonly extensions offered through a basic business interruption insurance policy. Overall, business interruption insurance is intended in all intents and purposes to allow a business to return to normal operation after a disaster as though the disaster never occurred. Business interruption insurance cannot be purchased as a stand-alone policy, but as an addition to the business’ property insurance policy.
Standard time provisions on a business interruption policy are defined as the starting date of the proclaimed peril, through the repair, and to the restored condition business interruption before said peril.
When filing a business interruption claim, a few supporting documents are needed outside of your insurance policy. These documents include but are not limited to: business expense reports, business revenue reports, any details regarding business history including physical address number of employees, and more.
The basic business interruption claim formula is:
Net Income + Continuing Expenses + Extra/Additional Expenses = Business Interruption Loss
There are several elements to be inspected when handling a business interruption claim, some more obvious than others. Utility costs, payroll, taxes, additional advertising for when the business does resume normal operations, are all some factors that can be overlooked. Thorough inspection is crucial in the case of a business interruption claim.
While a business interruption insurance policy may appear complicated and extraneous, it can truthfully be the difference between life or death for your business. Business interruption insurance is protecting your livelihood, thus absolutely recommended. There are several details that make up a proper business interruption insurance claim. If you run into any issues as a policyholder with your business interruption insurance claim, please contact the attorneys at the Merlin Law Group for a free consultation.