4 Things You Should Know About Business Interruption Claims

When a business is forced to close its doors due to an unexpected event, it can file a business interruption claim with its insurance company. This type of claim can help the business recover some of the lost revenue it suffered as a result of the event. It’s also a claim someone files to compensate for their lost wages during a period of recovery after an injury or illness. No matter what the cause, there are some things you should know about business interruption claims before filing one. Here are six of them.

1. You Will Need An Attorney

Filing a business interruption claim can be complex, and you will likely need legal assistance. An attorney can help you gather the documentation you need to support your claim and negotiate with the insurance company on your behalf. For starters, you can get a consultation with the attorneys at https://the702firm.com/ to see whether you have enough reason and evidence to file a claim. After that, an attorney can help you put together the necessary paperwork, including a detailed incident report.

The Insurance Company Will Investigate

The insurance company will investigate the cause of the business interruption and determine if it’s covered under your policy. This process can take some time, so be patient and cooperate with the insurance company as they work to resolve the claim. Remember, you’re not the only one who has to provide documentation; the insurance company will also need proof that the business interruption was not caused by something you did or failed to do.

2. You May Be Repaid For The Loss of Business and Wages

If your business interruption claim is successful, you may be repaid for both the loss of business and the wages you lost during the period of closure. The amount you receive will depend on the policy you have and the cause of the business interruption. Keep in mind that you may only receive a portion of what you lost, so don’t expect to be made whole again after filing a claim. Also, be prepared to wait for reimbursement – it may take several months for the insurance company to issue a payment.

3. You May Need To Prove Financial Loss

One of the things the insurance company will want to know is how much financial loss your business suffered as a result of the event. This can be difficult to quantify, especially if your business is still in operation. However, you may be able to provide evidence of lost revenue through invoices, bank statements, and other documentation. To prove financial loss the right way, you need to do the following:

• Start by calculating the average monthly revenue for the 12 months before the event
• Subtract any revenue you earned in the month of the event
• Multiply that number by 12 to get your annual loss
• Add any expenses you incurred as a result of the event, such as those for repairs or temporary relocation

4. There Is A Deadline For Filing

In most cases, there is a deadline for filing a business interruption claim. Be sure to check your policy for specifics, but generally, you have one or two years from the date of the event to file a claim. If you wait too long, you may not be able to receive compensation for your losses. The deadline is there because the insurance company needs time to investigate the cause of the business interruption and determine if the claim is valid.

You Will Likely Have To Pay A Deductible

Like any other type of insurance claim, there is usually a deductible associated with business interruption claims. Be sure to find out how much the deductible is before filing a claim, so you’re not surprised by it later on. A deductible is an amount you have to pay out of pocket before the insurance company will start reimbursing you for your losses. Essentially, deductibles are calculated by multiplying the number of days of business interruption by the amount of the deductible. For example, if your policy has a $500 deductible and your business is closed for 5 days, you would have to pay $2,500 out of pocket before the insurance company would start reimbursing you.

As you can see, there are several things to keep in mind when filing a business interruption claim. By knowing what to expect, you can make the process easier on yourself and ensure that your claim is as successful as possible. Filing a business interruption claim can be daunting, but knowing what to expect can help make the process easier. By understanding the basics of business interruption claims, you can be better prepared to file a claim if the need arises.