Insurance companies offer the business interruption insurance to provide business owners with the opportunity to ensure their property if a disaster ever occurs in which interferes with their ability to maintain normal operations.  This can be quite relatable at this point in time with the two Category 4 hurricanes that have made landfall within the United States.  Hurricane Harvey and Hurricane Irma have reeked havoc on Texas, Louisiana, Florida, Georgia and South Carolina.  Each of those states have suffered devastating damages to their property both residential and business.  Business have been unable to operate due to a variety of reasons such as:  loss of electricity, contaminated water or structural damage to the property.  During these times, it makes it very difficult for the business owner to maintain any functionality and without normal operations there is no profit.  The insurance companies provide the business interruption insurance policy so that during these devastating disasters, the business owner is able to receive compensation for the income that was lost during this interruption.  As with any policy, there are limitations and time limits.  If the business owner has extended business interruption coverage, the business owner is often provided income during the period of time between when the business has been repaired and the operational income returning to the pre-disaster level.  Another policy is the contingent business interruption.  If the business owner has contingent business interruption policy, coverage is provided to the property of suppliers and/or consumers of the businesses products and/or services.

The extended business interruption policy and the contingent business interruption policy are extensions or additions to the basic business interruption insurance policy.  This policy provides coverage to the business owner, so that they can sustain enough funds to keep their doors open so that they will be able to return to normal operations once the damages from the disaster have been resolved.  Business interruption insurance is an addition to the actual business owner insurance policy and cannot be solely purchased as an individual plan.  There are standard time provisions set forth by the insurance company to define what will be covered as business interruptions.  The common standard time period is the starting date of the disaster and continues through the repair and into the restoration of business to normal operations.  

When a disaster occurs, and the result is devastating enough to interfere with normal business operations, then a claim must be filed utilizing the business interruption insurance and any other additional supplemental policies that have been purchased.  As a business owner you will have to provide documentation to the insurance company.  The insurance company will require the following:  business expense reports, business revenue reports, business history including the physical address and number of employees.  They may request more information before they approve your claim.  Most insurance companies utilize the following formula to assess the amount of coverage offered to the business owner.  Net income plus continuing expenses plus extra divided by additional expenses.  The result is what is defined as the business interruption loss and that will be the number the insurance company should provide.  There may be specific areas of the business that may be overlooked with submitting the total costs.  Do not forget to include payroll for your employees, utility bills, taxes and advertising.  Those are just a few of the items that may be overlooked if you are filing the claim on your own.  It will benefit you greatly to have Coffey McPharlin by your side filing this claim so that you will receive the full benefits of your coverage without having to worry about if your business will be able to sustain this devastation.  We will work hard for you to make sure that you receive the reimbursement you deserve.