Business interruption insurance is a type of coverage that compensates businesses for lost income caused by natural disasters or other covered perils. A business interruption policy may provide financial support for lost profits and operating costs should a company be forced to stop or scale back operations.
While insurance providers might tell business owners that pandemics aren’t covered by their business interruption insurance policies, it’s worth noting that they’re largely ignoring government directives for shelter-in-place and social distancing orders that have led to the widespread closure of businesses and lost revenue.
At Klotzman Property Damage Law, our Florida business interruption attorneys have extensive experience when it comes to handling business interruption insurance and commercial property damage claims that have been undervalued or denied by insurance companies. If your business has suffered financial loss due to the coronavirus outbreak or other disasters, we’re here to fight for you and protect your rights.
Don’t go up against your insurer by yourself. To schedule a free-of-charge, no-obligation claim evaluation by an experienced Florida insurance claim attorney, contact our Florida law office today by dialing 954-915-7405.
What Can I File a Business Interruption Claim For?
Many businesses are currently experiencing unparalleled disruption due to COVID-19. In virtually all states, all businesses, excluding those deemed essential, have been forced to close, causing considerable business income loss. Fortunately, thanks to business interruption coverage, affected businesses can recover some, if not all, of their business losses, depending on their property insurance policy.
Business interruption insurance compensates businesses for any lost earnings as a result of operational disruptions. Physical property loss or damage resulting from calamities like earthquakes, fires, and hurricanes are examples of typical disruptions. The term “lost business income” generally refers to the net income that a company would have generated from its regular operations, barring the disruption and day-to-day operating costs, such as payroll. The terms and conditions of the insurance policy, which can have a wide range, as well as the applicable laws that govern the interpretation of these terms and conditions, determine the specific coverage.
Business interruption policies generally compensate the assured for profits or lost business income during the loss period. If you’ve suffered losses due to the pandemic or any other covered disaster, here are some of the things you can claim for through your business interruption insurance, depending on the policy’s terms and conditions:
- Extraordinary expenses: Some insurance policies will compensate the insured for repairing damaged equipment and inventory as well as the business’ operating costs at a temporary site until the original location is renovated and fully operational.
- “Denial of access” losses: This typically occurs when natural disasters and other incidents cause governmental authorities to refuse companies access to their property for various security reasons, even though the properties aren’t damaged. Denial of access may still be covered under your policy.
- Rebuilding costs: Depending on the language used in the policy, some businesses could be reimbursed for the extra money they spend on safety enhancements and other improvements that could help the business avoid similar interruptions in the future. Commercial property damage is usually a costly expense for any business.
Even the cost of hiring a financial expert to estimate losses may be covered by some policies. This is because carriers value the objectivity and thoroughness that experienced experts bring to the claims process, especially when dealing with a major disaster.
There’s so much you can claim if you have business interruption coverage, but these are some of the key things you should consider pursuing. For help determining what to claim for, consider working with a professional business interruption attorney for legal counsel. Contact Klotzman Property Damage Law for more on business interruption insurance claims.
What is the Business Interruption Claims Process?
Companies whose operations rely on having physical locations such as restaurants and warehouses are the top claimants of business interruption. While that’s the case, most of these businesses found, at the start of the pandemic, that not all loss events are covered by their business interruption insurance policies. Most policies require physical damage caused by vandalism, fire, natural disasters, or other covered events to be triggered.
Once it’s been established that an insured event did cause damage to the premises or led to losses, business owners can then start the process of filing a claim. However, since business interruption claims can be quite complex, there are steps that businesses need to follow when filing for compensation.
Step #1: Review your insurance policy for coverage.
Checking your insurance policy is the first step in filing a claim for business interruption. Business interruption policies, which vary depending on the type of policy, generally only cover damage caused by known and insured risks. Some policies (called peril policies) specifically and individually name each risk they insure against, whereas other policies may assume that all risks that aren’t specifically excluded are covered (all-risk policy). You should look for a business interruption endorsement that specifies your coverage and/or the duration of the coverage. The specific risk may not be covered by your Commercial Package Policy (CPP) or the duration of the loss may be capped.
Step #2: Determine whether lost income can be offset by future earnings.
Business interruption losses can be challenging. A business interruption policy is designed to safeguard you against financial losses brought on by the complete or partial cessation of business operations as a result of a covered event, such as a disaster. Business interruption insurance covers lost revenue that isn’t made up by increased earnings in the future. The business interruption must be calculated if it isn’t offset by the business’ future earnings.
Step #3: Establish the length of the restoration.
The restoration period refers to the time needed for the property to be fixed, reinstated, or replaced so that your business can resume. Business interruption policies typically offer benefits during the restoration period. The period typically starts on the day of the incident, but in some circumstances, it might be necessary to wait 72 hours before the period of restoration begins.
Step #4: Determine the impact or amount of revenue lost.
Generally speaking, the terms covered by the policy and how to calculate loss sustained during the interruption are both outlined in your insurance policy. It is important to carefully assess lost sales, projected sales, earnings, and other costs. Are production or inventory records used to support your loss, or do they also include additional costs that might or might not be recouped? What is recoverable should be specified in the policy.
Step #5: Apply the deductible in either a dollar amount or a percentage amount to complete your business interruption loss.
The declaration page of your policy should include the deductible percentage, which is crucial for concluding the business interruption claim.
Navigating the insurance claim process can be challenging, particularly when you’re under the pressure of having a temporarily shut-down business. Insurance companies may try to delay, underpay, or deny legitimate claims, even though coverage should typically be granted for covered losses. Our team of business interruption lawyers at Klotzman Property Damage Law is well-versed in these and other bad faith strategies insurers employ to delay paying claims to generate profit for themselves. Get in touch with our office right away to learn how we can assist you in obtaining the payments that you are entitled to under the terms of your insurance policy.
Civil Authority Clause
Millions of Americans are suffering greatly as a result of civil authorities across the country ordering many large and small businesses to shut down to the public. The majority of business insurance policies cover lost revenue as a result of government shutdowns. This coverage is commonly referred to as “Civil Authority” or “Business Interruption” coverage.
Since the current closures are targeted at particular businesses, many court decisions strongly argue that civil authority coverage will cover business losses brought on by government-ordered closures of businesses as a result of the coronavirus crisis. Due to this, U.S. businesses are suffering staggering losses as a result of the coronavirus. Sadly, insurance companies will still use any justification to avoid paying for these losses in spite of the civil authority clause in effect.
When businesses purchase business income insurance coverage, they expect protection. Businesses pay yearly premiums for protection if they are unable to carry on with business as usual but still have their insurance companies underpay, delay, or deny their claim, which is quite unfair. That’s why we are here for you – to help you fight for your right to receive compensation for the interruption of your business due to civil authority closure.
What Should I Do If My Insurance Company Denies My Business Interruption Claim?
A business interruption claim can seem difficult to submit to your policyholder. And while that might be the case, a Florida Business Interruption Claim can help reduce your stress. To obtain the compensation to which you are entitled, we will deal with your insurance provider on your behalf.
It’s critical to act quickly. If you want to submit a business interruption claim, you must take the following actions right away:
- Get in touch with your insurance provider and agent right away.
- Check your policy to see if the business interruption is covered. (If after reviewing your policy you’re still unsure, get in touch with an interruption insurance lawyer from Klotzman Property Damage Law for a free case review immediately.)
- Obtain financial records and other supporting documentation to demonstrate your company’s revenue before the interruption.
- Consult a qualified business interruption claim attorney for assistance.
- How can a Florida business interruption attorney from Klotzman Property Damage Law help me?
The COVID-19 disruption raises specific issues with insurance coverage. A business can decide whether submitting a business interruption claim is a practical option by carefully reviewing its policy’s terms and conditions and seeking professional advice. If you’ve decided that now is the best time to file an interruption, Klotzman Property Damage Law’s qualified attorneys are here to help by:
- Calculating lost revenue in a way that is tenable and withstands external scrutiny.
- Putting together a thorough insurance claim that demonstrates lost income
- Contacting the insurance provider to discuss particular claim issues as necessary.
- Supplying expert witness testimony and litigation support if the claim is litigated.
Get an Experienced Florida Business Interruption Attorney to Help With Your Claim!
The lawyers at Klotzman Property Damage Law have a great deal of experience handling all major insurance companies, litigating against the carriers when necessary, and handling all types of insurance claims, including hail damage insurance claims and so much more. We can assist you in recovering the compensation you need to restart your business through your interruption claim.
Our cases are well-prepared from start to finish, and our clients can rely on us to offer strong advocacy. Should worse come to worst, we are ready to go to trial if need be. Please get in touch with us right away to schedule a free consultation and case evaluation. Our Florida business interruption attorneys are ready to review your case and guide you through the business interruption claims process. Call 954-915-7405 now for assistance.