BUSINESS INTERRUPTION INSURANCE CLAIMS
/Business interruption insurance is intended for multiple reasons, it promises to compensate the insured for the income that was lost during the time period of interruption resulting from the disaster. When a disaster affects your business operations and you suffer losses, your business interruption insurance is designed to reimburse you for:
Lost income, which includes lost revenue and destroyed or lost merchandise
Other expenses, including temporary relocation and other necessary costs.
Generally, business interruption insurance is not purchased as a stand-alone policy but as an addition to the property insurance policy of the business and only covers the loss revenue and operating expenses of your business.
Right now, the country is experiencing an unprecedented disruption in the economy due to the current COVID-19 pandemic, and many businesses are suffering. As a business owner you may have or are planning to file a business interruption claim and have concerns about how to effectively protect your rights. Does your insurance cover COVID-19 related losses? What documentation do I need to provide to the insurance company? What if your claim is denied? These are all valid concerns.
DOES BUSINESS INTERRUPTION COVERAGE APPLY DURING THE COVID-19 PANDEMIC?
In order to have a valid and successful claim, you must meet two requirements:
The loss must result from a covered cause, meaning it can’t be listed as an exclusion in the policy; and
There must be a direct physical loss or damage to your business property.
The second requirement is where your claim may get complicated. The COVID-19 pandemic may slow down or even shutdown your business. It may have impacted your revenue or income. However, using technicalities in the policy, the insurance company may deny your claim as your losses do not meet the definition of physical damage.
There are situations where Covid-19 and other contagious diseases do cause physical damage or loss to a business. You may have had to close the business to decontaminate. Here in Pennsylvania, you likely had to close because the government has imposed restrictions which have prohibited physical access to your business, causing interruption and a loss of revenue.
THE BASIC BUSINESS INTERRUPTION CLAIM FORMULA:
Net Income + Continuing Expenses + Extra/Additional Expenses = Business Interruption Loss
There are several elements to be inspected when handling a business interruption claim. Utility costs, payroll, taxes, and additional advertising are some factors that can be overlooked.
A thorough inspection is crucial.
While a business interruption policy may appear complicated and extraneous, it can be the difference between life or death for your business. This insurance is protecting your livelihood, thus absolutely recommended.
DO YOU HAVE A BUSINESS INTERRUPTION CLAIM?
Here at The Curran Firm, PC, our attorneys are available to answer your questions and try to help alleviate your concerns. We have a long history of representing consumers and business owners when they need someone in their corner to advocate for them. Our attorneys can help you review your policy and understand what options you have as a business owner in these uncertain — and unprecedented — times.
Contact us today by calling 610-566-5300 or filling out the contact form below.