Business Interruption Claims

Businesses sometimes get interrupted or halted because of a physical loss, such as natural disasters or vandalism. These interruptions can cause a loss in income and revenue, making it difficult for the business to sustain itself over time. Insurance coverage can replace much of that lost income, which includes rebuilding the company and helping it to recover from a disaster. When your business is undergoing an interruption, such as a fire or other unfortunate event, you can get additional consultation on how to get maximum compensation for your losses. Call Florida Home claim to learn more about the process. 

Business Interruption 

What is covered by business interruption insurance?

This form of insurance replaces any lost income when a business halts because of physical loss or damage. This includes any income loss that happens when your business can’t function due to an unplanned event. Business interruption insurance helps place your business back on track by providing enough compensation to put your company in the trading position it was before the disaster. 

What is not covered by business interruption insurance?

Business interruption insurance doesn’t cover any broken items that were caused by the covered event. For natural disasters, such as an earthquake or flood, you will need a separate insurance policy. Any undocumented income that wasn’t listed on your business’s financial records also won’t be covered by business interruption insurance. If there was an infectious disease that shut down your business, this also wouldn’t be included. Utilities that get turned off because of business closure also won’t be covered by the insurance. 

What triggers a business interruption claim?

Many different events can be the cause of a business interruption, allowing you to initiate a claim. Some of the major causes include fires and explosions, natural disasters, cybersecurity risks, and legal or regulatory changes. For example, regulations that change can significantly impact your business operations; this can cause temporary damages to your business revenue. Natural disasters that disrupt business, such as an earthquake that prevents customers from purchasing your services, are a great example. Sometimes electronic components and factory machinery can cause an explosion or trigger a fire. Since this event can slow down business operations, the number of losses can also be covered. Cyber security risks happen when malicious codes, viruses, and DDoS attacks happen. Because these events can disrupt business operations, the loss of income sparked by a cyber security threat can also be covered in damages. 

How does business disruption insurance work?

This insurance policy replaces lost income when a business is halted due to a qualifying event. Based on the type of event that occurred, your insurance company will estimate damages that qualify for coverage. This can include lost revenue, relocation costs, lease payments, loan payments, employee wages, taxes, and more. Any lost revenue that was caused because of the disruption can be compensated as long as it was the result of the interruption and directly related to a qualifying event. The insurance policy helps prevent the temporary or permanent closure of business so that you can continue running at a normal pace. Insurers lean on their own professionals to review and calculate the losses. They use a business interruption formula to come up with how much you will be compensated for. 

Is business interruption insurance mandatory?

Business interruption insurance is not required by law, but it is highly recommended. If you decide not to use interruption insurance, you would have to plan for interruptions in your supply chain and the closure of your business in the case that unplanned events occur. 

Does business interruption insurance cover a pandemic?

This form of insurance coverage does not always cover a pandemic unless the contagious disease is specifically listed by the insurer underneath the policy. However, some states have introduced legislation that demands business insurance coverage to retroactively include pandemic-related losses. Unless your policy outlines the types of diseases that are covered, it probably won’t be included. 

Additional Information On Business Interruption And How the Process Works

When your business gets interrupted due to unforeseen circumstances, you can receive the help of legal professionals who can make sure that you receive total compensation. You will need to initially contact your insurance company to alert them that your business is interrupted by a qualifying event. However, after they have come up with their estimation for compensation or have completely denied you, it is a good idea to get a legal team to review your damages and come up with the correct amount. They can represent your claim and defend your right to receive coverage. Call our insurance attorneys at Florida Home Claim today to learn more.