In the face of a natural disaster such as Hurricane Florence, business owners filing business interruption insurance claims may find their requests unexpectedly denied.

Business interruption insurance claims can be complicated, and all bases need to be covered by an owner way in advance of an actually need to be effective.

According to an article by Insurance Market Source, businesses that are “brick and mortar” almost always carry commercial property insurance. In the event of property damage caused by wind to the physical building structure or personal business property, this coverage will kick in and provide support.

Some policies include an endorsement for business income coverage or loss of revenue due to the business having to close for a period of time. These claims can be harder to prove. Business owners may find their business interruption insurance claims denied without direct proof of damage.

There are many reasons a business might have to close in the face of a natural disaster that don’t include actual physical damage to a building or personal property. Required regional evacuations by authorities and general employee safety are two such reasons.

Without careful consideration and advisement from an independent and learned insurance professional, owners might find themselves denied after filing business interruption insurance claims which they assumed would help cover payroll and recover monies lost due to closure and resultant regional supply chain issues.

Often a business is not touched by the wind in a hurricane but suffers because of the rain and storm surges that follow. Homeowners and business owners gain flood insurance as a separate endorsement through application to the National Flood Insurance Program. Despite participation in this program, there is no guarantee that insurance claims will be paid through the program without direct damage occurring.

According to Insurance Market Source, in order to be on the winning side of your business interruption insurance claims, business owners must have clear and precise documentation of payroll requirements and business income history with which to prove economic loss. This documentation needs to be ready in the event of a disaster to transmit quickly.

To protect themselves, insurance carriers often issue what is called a “cease bind” in advance of an anticipated natural disaster such as a hurricane. This prevents the insured from adding on multiple endorsements to cover them last minute without having previously established a bank of payments from which to draw. As Hurricane Florence approached, a “cease bind” was put into effect on the east coast of the U.S. and was lifted a few days after the storm had passed.

Even with proper endorsements in place by the well-prepared business owner, there are many losses that are likely not to be covered to their surprise. Business income interruption insurance will not cover cost of utilities or lost income due to only being able to be partially open for business.

If your business suffered because of a natural disaster and you were not compensated as you expected or felt was due under your plan, you may qualify for an initial consultation free of charge.