All types of businesses experience interruptions now and then, whether due to electrical outages, accidents, or even a pandemic. Interruptions in work flow can cause large losses of business income. Depending on the type of claim, an insurance policy may cover these losses. When another party is responsible for causing the interruption, consider asking them to reimburse you through a business interruption claim.
1. Do I have to file a claim under my own insurance policy first?
No! You don’t want to make unnecessary claims on your own policy. Too many claims may hurt your rating with your insurance company and is an invitation to be dropped. Your business may have the legal right to be reimbursed for all of your losses from the other party. When the interruption is another party’s fault, consider going after their insurance coverage instead.
2. Can you give me an example of a Business Interruption Claim?
Here’s an example: Joe’s Painting has a custom-built van with everything Joe needs to expertly paint commercial buildings. Joe was on his way to a big job when another driver ran into him, putting the van out of commission for two weeks. Joe lost the $10,000 job. The driver’s insurance company agreed to fix the damages, but wouldn’t pay for Joe’s lost income during the two weeks. They said he should have rented a van and been able to do the job. Joe responded, “There are no van rental companies with the necessary shelves, straps and hooks for my equipment. I need special towing equipment for my paint trailer and special racks for the roof. A regular rental van from Alamo just doesn’t work for my business.”
Here’s another example: ABC Accounting has a building on a corner of Main Street. A car came hurtling through the light, flipped up over the curb, and plowed into the front lobby of ABC. Fortunately, no one was hurt, but the ABC accountants couldn’t work for a week while the electricity was off and repairs were being made. They were in the middle of tax season and lost $20,000 that week.
3. How much can I get for my claim?
Every insurance claim is different because every loss is different. Some businesses make $500 per day and others make $5,000 per day. You will have to prove through business records how much you lost. If you don’t have actual lost income from invoices or contracts, an estimate based on previous work may suffice. You will also have to prove how you tried to get back to work as soon as possible (called “mitigation”).
4. How do I make a claim?
File a claim against the at-fault party’s insurance policy. Their insurance information is most likely listed on the police report. If no phone number is listed for their insurance company, Google their claims department and toll-free number. If there’s no police report, ask the at-fault party who their insurance is. As you can imagine, not everyone is willing to disclose this information. Sometimes insurance coverage is found on-line and through skip tracing services.
Filing a claim will take time and effort on your part. You will have to prove the negligence of the other party and your damages (lost income). It will be important to have supporting documents that prove each dollar lost.
5. How do I Find a Professional to Help?
There are professionals who can help you through the entire claims process. Be sure to contact an attorney who understands the insurance industry and knows how to calculate losses properly. An experienced insurance attorney knows the law and the type of losses that can be included. For example, in addition to the repairs and lost income, consider pursuing the diminished value of any equipment or property damaged.
After an incident that causes financial harm to your business, consider all options to protect your business. Eckert & Associates, PA has attorneys available to speak with you about your business interruption claim. The call is free. Plus, our firm handles all matters on a contingency fee basis, so you owe no fee unless we collect for you.