Remain open—this is perhaps the most important thing when a business suffers from damage. But sometimes, you can’t and, while your business is shut down, you’re losing money. Business interruption coverage exists for these situations and understanding the different types will help you overcome a claim denial.
Coverage for business income
This coverage is for your normal operating expenses and is determined by your financial records. It includes pre-tax profits and expenses such as payroll.
This coverage contemplates interruption costs, which go above and beyond your normal operating expenses, typically related to the event, which led to the interruption. It includes those expenses that are necessary to restore the business and get it running again, even if it’s at a temporary location.
Business interruptions can also be caused when it’s another business which suffers damage, rather than your own. For instance, if one of your suppliers is struck by a storm and is forced to close, you may no longer be able to provide your product or service. Contingent coverage exists for these situations.
Civil authority coverage
This coverage contemplates situations in which your business is forced to close due to a government mandate. It’s triggered when access to your location is forbidden, due to a loss that occurred at another location.
Every business interruption is different and coverage is dependent upon the language of your policy and the instant circumstances. Insurers commonly deny coverage entirely, or pay out less than they should, in an effort to minimize the claims they must pay. When your insurance provider balks at providing the coverage you’re entitled to, speak to a professional who is experienced at handling insurance denial disputes. They can help to ensure you receive everything covered by your policy.