Many companies, especially those that operate in areas prone to natural disasters, should consider business interruption insurance. Would you like to learn more about this coverage? If so, check out our previous article on, “What Is Business Interruption Insurance.” A commercial property policy may only cover certain repairs of damaged property. On the hand, this coverage generally provides the cash flow to cover revenues lost and expenses incurred while normal operations are suspended because of an applicable event.
But with fair warning, you must know that there are several complications with business interruption insurance. This coverage arguably has the most complications on the market today. Submitting a claim can be time-consuming and requires careful preparation. Here are some best practices to keep in mind.
Contact your insurance rep by phone as soon as possible to describe the damage. If your policy has been water-damaged or destroyed, ask him or her to send you a copy.
When filing a claim, read your policy in its entirety to determine how to best present it. It’s important to understand the policy’s limits and deductibles before spending time documenting losses that may not be covered.
Maintain accurate records to support your claim. Reorganize your bookkeeping to segregate costs related to the business interruption and keep supporting invoices. Among the necessary documents for a business interruption insurance claim are:
The calculation of losses is one of the most important, complex and potentially contentious issues involved in making a business interruption insurance claim. Depending on the scope of your loss, your insurer may enlist its own specialists to audit your claim. Contact us for help quantifying your business interruption losses and anticipating questions or challenges from your insurer. And if you haven’t yet purchased this type of coverage, we can help you assess whether it’s a worthy investment.