Damages That Can Be Covered Under Your Insurance
It is important to know that if you are filing a business interruption claim, there must be physical direct damage to the insured property. If there is, and you have business interruption insurance, here are some of the things that may be covered in your policy to get reimburse:
- Rent and utility costs or any other fixed expenses prior to the incident
- The lost of revenue because of the closure
- Expenses from where the business is temporary located
- In some instances, coverage may be extended to advertising their temporary location
- Loan payments can be covered because you do pay for them monthly
- Taxes are covered in any disasters because businesses are required to pay for them
- If a government implements a city-wide curfew or any other restrictions that causes people to not go to work or take care of their business, then this could be covered by your insurance
However, business insurance coverage isn’t by itself. There are various types of policies included, which are:
- Commercial Property Insurance
- Business Owners Policy
- Commercial Package Policy
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Documents That Should Be Given
When filing a business interruption claim, it is important to compile all the documentations from the disaster so that it can act as evidence when it is given to your insurance provider. You should be able to provide:
- Detailed monthly report
- Inventory summaries
- Budget for your business
- Documents for the expenses that you have obtained
- Profit statements and loss statements
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What Your Business Insurance Won’t Cover
It’s been stated that physical direct damage to your business can be covered by your insurance. Here are other things that are excluded from your business insurance policy:
- Utilities won’t be covered because it would typically stop if the business location isn’t being used
- Unaccounted income won’t be covered because you should be responsible for keeping your business’ revenue so that the insurance company can accurately reimburse you for it
- If your business is partially damaged but is still opened for business, then it won’t be covered in your business insurance
- You also won’t get coverage if its not mentioned in your business insurance policy. For example, flood damages or if you closed your business willingly for a family vacation or emergency
- If a heavy storm occurs such as hurricanes, tornadoes, or anything that would cause powerlines to go down, you will most likely not get coverage for it
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Disaster Leading To An Interruption Claim
Terrorist attacks: A great example would be 9/11. Where the world trade centers were lost and suffered a great deal of damage that required reparation over a long period of time. The claim would have to cover all the damages after the attack, such as loss of revenue.
Severe weather conditions: Tornadoes, hurricanes, and tsunamis are just some weather conditions that can cause a business to file a claim. Make sure you know what your policy covers.
Fires: They would perform an investigation to see how the fire happened; accidentally or purposely. But this is another reason for filing an interruption claim.
Case Study
- TransCanada Energy USA Inc., is power plant company that provides energy to New York metropolitan area. In 2008, they suffered a power generator break down, that remained out of service for a total of 8 months. They ended up claiming over $48 million in coverage.
- Lantheus Medical Imaging Inc., is a pharmaceutical manufacturer that made a product of which required a certain nuclear isotope. That reactor was shut down in May 2009, due to a leak it endured, which caused a reduction not a stop in the company’s production. The insured was asking for the full $70 million in loss of production, because of this, they did not receive the $70 million asked for because they were still producing products.
Statistical Information on Business Interruption Claims
- There are about 1 in 5 businesses that go through major business interruption every year.
- Out of 644,908 insurance claims that were filed this past year there have been 1,931 business interruption related claims.
- In 2010-2014, 88% of business interruption claims were not from natural disasters but came from human errors or technical issues
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How our Public Adjuster will help your business
If you don’t know what steps to take after your business has suffered a disaster that has resulted in a loss, or you are unsure if your disaster is subject to a claim, contact us today. We will provide you with the adequate information because your insurance company might avoid giving you that information so that you won’t have to file a claim. If you were denied a business interruption claim, we are your answer! Working with a public adjuster increases your chances of getting everything that is owed to you. Don’t look any further.
