Best Practices When Filing a Business Interruption Claim
Many companies, especially those that operate in areas prone to natural disasters, should consider business interruption insurance. Unlike a commercial property policy, which may cover certain repairs of damaged property, 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 be warned: Business interruption insurance is arguably among the most complicated types of coverage on the market today. Submitting a claim can be time-consuming and requires careful preparation. Here are some best practices to keep in mind:
- Predisaster financial statements and income tax returns,
- Postdisaster business records,
- Copies of current utility bills, employee wage and benefit statements, and other records showing continuing operating expenses,
- Receipts for building materials, a portable generator and other supplies needed for immediate repairs,
- Paid invoices from contractors, security personnel, media outlets and other service providers, and
- Receipts for rental payments, if you move your business to a temporary location.
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.