If you own a business and have business interruption insurance, you need to be certain you are properly compensated after a hurricane, fire, flood or other disaster. Whether or not your business incurred structural damage or not, your business and your finances could have been adversely affected by occurrences that were beyond your control.

Business interruption insurance is a separate policy that insurance companies provide as an option that businesses can purchase to cover the loss of income during a disaster. In many cases, the business property incurs structural damage that requires repairs before reopening to resume business.

Any company that remains closed for an unplanned, extended period of time doubtfully will remain viable for very long. Business interruption insurance is a policy designed to bridge that unexpected gap in income.

Denied Business Interruption Insurance Claims

In some cases, business owners have experienced their claims denied or excessively delayed because, although their business was interrupted, the property itself was not damaged.

A “contingent business interruption” insurance policy is a type of insurance that can help cover losses incurred when customers and suppliers of merchandise are unable to physically reach the business location.

Flooded roads, destroyed bridges, unstable roadways, fallen trees, fallen electric lines and excessive debris can stop customers (and employees) from reaching a business for days or weeks. Business owners need and expect such interruptions in their ability to earn income to be covered by their business interruption insurance policy.

Contingent business interruption insurance claims may take longer to resolve, however, because information is needed from a third party. For instance, if ABC Grocery Store receives all its milk deliveries from XYZ Dairy, which is surrounded by destroyed roads and can’t make deliveries, ABC Grocery Store is going to be without milk products for an indeterminate amount of time. In this case, the grocery store could make a contingent business interruption insurance claim.

To make sure ABC Grocery Store is properly compensated for its inability to provide milk to customers, the insurance company will need documentation from XYZ Dairy that it was unable to deliver milk products for a defined amount of time. A look at ABC Grocery Store’s sales history will help determine how much revenue the store lost due to its inability to sell dairy products during that time period.

In order to make any type of business interruption insurance claim, the business owner will probably need claim preparation assistance that includes help from forensic accountants who will work with the insurance adjuster. Preparing the details of a claim costs money, and insurance companies often only cover the costs of reports and data that the insurance company has requested.

Whether or not certain claim preparation fees will be covered depends upon the insurance company’s determinations and policy coverage limitations.

If your business has suffered because of a fire, flood or hurricane event, you could be eligible to receive a greater amount of money than you received upon settlement with the insurance company. Make sure you are properly compensated for your losses.