How Do I File a Business Interruption Insurance Claim?
If your business has suffered an unexpected setback resulting in temporary closure and suspension of operations, it can be difficult to figure out how to pick the pieces back up. Fortunately, many business property policies include business interruption insurance in their coverage, allowing you to cover any costs or lost revenue from an unexpected closure.
If your business is currently closed or shut down due to a sudden event, please contact Bentley & More LLP today. Our California business interruption insurance attorneys have the knowledge and experience to assist you during these difficult times.
What is Business Interruption Insurance?
Business interruption insurance helps cover the costs when your business operations are temporarily put on hold. Some providers make it an elective coverage, while others may automatically add it to your property policy. Regardless, it generally covers:
- Lost revenue while the business has ceased operations
- Any operating expenses such as utilities, rent, mortgage, and taxes
- Employee wages for personnel for a set period of time
- Any expenses to repair your property
- Relocation costs to a temporary location while the original location is being repaired
How Do I File for Business Interruption Insurance?
Filing for business interruption insurance may seem simple and straightforward, but it can be a comprehensive, complex process — especially if a large number of similar businesses are also filing a business interruption claim.
Gather All Pertinent Information
Before starting the process, it is highly recommended to gather any data or information that is pertinent to your case. This includes:
- A copy of your property policy, including any provisions for business interruption
- Expense statements and P&L documents from the last 12 months, at minimum
- Any financial documents that clearly show the impact of the interruption on your business: receipts, invoices, statements
- Any other unexpected expenses incurred due to the interruption
- Any financial transactions, contracts, or agreements that have been postponed or otherwise canceled due to the interruption
- Any governmental mandates or orders that have directly resulted in the interruption, if applicable
- Any prior correspondence with any agents regarding interruption
Consult An Attorney, Especially in Special Circumstances
When you are filing a business interruption claim, it is always recommended to first turn to an experienced attorney for advice. Business interruption insurance policies are often written in a broad scope so that providers can interpret the policy in a very specific manner. This actually allows providers to approve claims in a very narrow scope of qualifications.
For example, many policies state that business interruption insurance kicks in after a “suspension of operations” regarding a business. However, the term “suspension” is often never fully defined, even though it could be interpreted in a number of ways.
Additionally, in unprecedented circumstances, it can often be difficult to figure out what is and is not covered. The recent Coronavirus outbreak, for example, is typically something that is not explicitly mentioned in coverage policies.
A skilled insurance lawyer can help you sort through the language in your policy to figure out what is and isn’t covered. In cases that are covered, they can help construct a compelling case and negotiate it on your behalf — and in situations that may not be covered, they may be able to find other avenues for financial relief in your policy.
File Through Multiple Methods
Once you have all the required materials on hand, you can then file your claim with your provider. For commercial property policies, there is generally a specific agent assigned to your policy — if this is the case, you can contact them to start the filing process.
Otherwise, your provider will commonly offer an easy way of finding an agent near you with an online locator on their website. You may also call your provider’s toll-free number for information regarding a business interruption claim.
Some providers also offer an online form to start the claims process. You may submit your information in a form to them, and then they may call you back asking for further information and details.
The most effective way to file your claim is to do so with an attorney. Those who have experience and knowledge in business insurance may have inside knowledge of what it takes to have your claim properly evaluated. They can then correspond with the provider on your behalf throughout the process with your best interests in mind.
There is a Waiting Period for Business Interruption Insurance Claims
It is important to note that most, if not all, business interruption claims in California have a waiting period before they are able to receive any funds. Starting from the first day your covered loss begins, the waiting period is usually considered as a type of “deductible” by providers on condition of coverage.
In California, the waiting period can be anywhere from 24 hours to 72 hours — but most commonly, 72 hours is the standard waiting period time before you are paid out. In other words, you will not be compensated for the first three days that your business is non-operational.
We Can Help You File a Business Interruption Insurance Claim
The business interruption claim filing process can be a stressful process made easier by legal representation. If you are considering filing for business interruption insurance, please contact us first to discuss your case. Our business interruption insurance attorneys act in your best interests to get the compensation you need in this difficult time.