Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.
Business Interruption Insurance
After a natural disaster like a hurricane or fire, business interruption insurance helps businesses stay afloat if offices and inventory are damaged. For many business owners, this coverage can be vital to the health of a business since accidents and natural disasters can irrevocably damage a business’ profits.
Depending on the exact terms of a policy, the Insurance Information Institute says the following costs may be covered by business interruption insurance:
- Profits that would have been earned if the business was not closed
- Operating expenses
- Costs associated with moving a business to a temporary location
- Costs of training personnel on new replacement machinery
- Financial losses due to a government-mandated business closure
- Employee wages
- Taxes
- Loan payments
- And more
There is usually a waiting period before business owners can receive benefits from their insurance policy. The exact time will depend on the policy terms but it’s typically two to three days. Businesses should make sure they have the ability to cover costs until the policy coverage kicks in.
Some policies may include extra expense insurance. This coverage helps compensate businesses for any expenses above and beyond typical operating costs incurred when attempting to stay open during a restoration period. An insurance company will typically provide extra expense insurance if the measures will help reduce the long-term cost of a business interruption claim, according to Marsh.com.
Business interruption insurance may not cover other costs associated with a closed business, such as:
- Utility services
- Income if there is not several months of documentation
- Losses caused by partial closures
- Losses caused by non-covered damages (typically flood and earthquake damage)
- Closures caused by downed power lines
As with all insurance claims, documentation of losses is key. Without this documentation, insurance companies may not fully compensate business owners in the way they expect.
Denied Business Interruption Insurance Claims
Some policyholders may find that their claims are denied or paid significantly less than they think they are owed. In these situations, responsibility often falls onto the consumer to fight with their insurance company to ensure a better outcome. This can mean repeated conversations with insurance adjusters and providing extensive documentation of losses and damages.
Seeking Help From An Insurance Lawyer
Although most people associate attorneys with litigation in a court, they can also be helpful when dealing with insurance. Insurance companies naturally want to payout the least possible amount when consumers file a claim – that’s just how business works. Experienced insurance attorneys can help consumers advocate for their rights and secure the maximum amount of compensation for their claims.
Attorneys can provide advice and guidance, or they can help facilitate communication between the insurance company and the policy holder. Policyholders should look for lawyers who specialize in insurance disputes and have a history of successful performances in these situations.
