Was your business building damaged by a storm or suffered some other kind of damage that caused your business to shut down for a period of time? Did you need to temporarily relocate your business to another location which caused a loss in profit? Was the area your business is located in blocked off by State or County authorities due to a natural disaster? Your insurance policy may have coverage for this loss of profit which you are entitled to get back.
Typical business interruption coverage looks something like the following:
g. Business Income
(1) We will pay for the actual loss of “Business Income” you sustain due
to the necessary suspension of your “operations” during the “period
of restoration.” The suspension must be caused by direct physical “loss”
to property at the described premises, including personal property in the
open (or in the vehicle) within 100 feet, caused by or resulting from any
Covered Cause of Loss.
(2) We will only pay for loss of “Business income” for a maximum of 12
consecutive months after the date of direct physical “loss.” This
Additional Coverage is not subject to the Limits of Insurance.
h. Extended Business Income
If the necessary suspension of your “operations” produces a “Business
Income” loss payable under this policy, we will pay for the actual “loss”
of “Business Income” you incur during the period that:
(1) Begins on the date property except finished stock is actually repaired,
rebuilt or replaced and “operations” are resumed; and
(2) Ends on the earlier of:
(a) The date you could restore your “operations” with reasonable
speed, to the level which would generate the “Business Income”
amount that would have existed if no direct physical “loss” or
damage had occurred; or
(b) 30 consecutive days after the date determined in h.(1) above.
However, Extended Business Income does not apply to “loss” of “Business
Income” incurred as a result of unfavorable business conditions caused by
the impact of the Covered Cause of Loss in the area where the described premises are located.
Loss of “Business Income” must be caused by direct physical “loss” or
damage at the described premises caused by or resulting from any Covered
Cause of Loss.
Under the definitions section of the policy, “Business Income” is defined as follows:
“Business Income” means the:
A. Net Income (Net Profit or Loss before income taxes) that would
have been earned or incurred; and
B. Continuing normal operating expenses, including payroll, incurred.
If your insurance company is trying to limit the amount of restoration time for which they will pay lost profit or trying to argue there is no loss of profit, you need representation to protect your business and its finances. Find out first if you have coverage for business interruption and if you do, make sure you receive all of the profit back that you lost. Don’t let the insurance company either attempt to limit the amount they will pay or try to take the position there was no lost in profit based on paperwork. Almost all businesses have a loss of some profit following damage to their building. If the insurance company is delaying the adjustment of the claim or delaying the repair which would allow you to get back up and running, they owe for that loss of profit during that time period.
If your building is damaged to such an extent that you need to temporarily relocate, your policy may have coverage for the cost to relocate as well as the loss of profit due to that relocation. Don’t just accept what the insurance company is telling you. Here at Christopher Ligori & Associates we offer free claims and policy review. If you have coverage for it you are entitled to it. Don’t let your business suffer one loss due to a storm and then another loss due to the insurance company not paying your lost profit. Let Christopher Ligori & Associates help you protect your business.