Imagine this…
You’re the owner of a small business, and as you pull up to your location, you find that a car has crashed through your storefront. Police and paramedics are attending to the injured and taking statements from witnesses while you stand there, dumbfounded by the devastation before you. Your entire livelihood was built into this business, and just as you were starting to gain momentum, everything is suddenly in ruins due to unforeseen circumstances.
So, what happens next? You call the property manager and your insurance company to file a claim, desperate to get back on your feet as quickly as possible. Your insurance agent informs you that you have business interruption coverage, and a claim will be opened. An adjuster will soon be in touch to outline the next steps. However, as the claim progresses, you come to a harsh realization—the payout won’t cover all of your losses. At this point, what do you do? Who can help?
Undeniably, property damage—natural or man-made—that causes business interruption can be devastating, leading to financial strain and operational setbacks. As a result, revenue losses can accumulate quickly, creating mounting debts that impact the company and its employees.
Fortunately, your business may be able to recover some of these losses through insurance; however, there is sometimes a gap between what the coverage is designed to pay out and your actual losses. This is where our team comes in. We specialize in helping businesses navigate the claims process efficiently to ensure they receive the compensation they deserve through proper claims management, demand package preparation, and experienced negotiations.
Understanding Business Interruption Claims
Simply put, business interruption insurance is designed to cover lost income and additional expenses incurred when a business is forced to close or limit operations due to a covered event, such as natural disasters, fires, or other disruptions. To make this work, businesses must provide detailed documentation proving the extent of their losses. While this insurance is a valuable asset, there can still be gaps in coverage, leaving the insured not quite made whole.
Key Steps to Pursuing a Business Interruption Claim
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- Gather Documentation Collect financial records, tax returns, profit and loss statements, and business contracts to substantiate the claim. Importantly, third-party, verifiable documentation is crucial when pursuing a claim against another party. The burden of proof always falls on the claimant, and self-created documents are considered speculative and are likely to be denied.
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- Understand Policy Coverage – Review insurance policies to identify the terms and conditions that apply to your specific business interruption claim. By doing this, you can avoid surprises and set realistic expectations.
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- Build a Strong Demand Package – Compile a comprehensive claim with all necessary supporting documents to present to the insurer. Indeed, a complete and well-organized demand increases the likelihood of fair compensation.
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- Communicate with Stakeholders – Engage with repair shops, suppliers, and other parties to ensure all relevant information is included in the claim. Furthermore, document all communications and follow up on phone calls with emails verifying the information discussed.
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- Negotiate the Claim – Work with the insurer to address any disputes and secure the appropriate compensation. In these discussions, flexibility and a thorough understanding of the numbers are essential. If you aren’t sure, experts such as CPAs and repair professionals are often available to assist for a fee.
How We Can Help
Our team is experienced in handling business interruption claims from start to finish. Specifically, we assist with:
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- Building Accurate Demand Packages – We work with you to ensure all necessary financial records, estimates, and supporting documents are included in your demand, along with a detailed breakdown of your estimated losses.
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- Coordinating with Repair Shops and Vendors – If a shop is unwilling or unable to provide necessary documentation, we step in to gather the information from any possible source to verify accuracy.
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- Clarifying Client Involvement – When business names or ownership details are unclear in reports, we investigate to confirm the correct information and ensure the compensation goes to the right party.
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- Negotiating on Your Behalf – We work with insurers, both at-fault and subrogation, to advocate for fair compensation, reducing the burden on your business. With years of experience, we know how to support any property damage claim effectively.
In conclusion, recovering business interruption revenue losses requires a thorough, well-documented approach. Thankfully, with our expertise in claims management and negotiations, we help businesses navigate the complexities of the process to achieve successful outcomes. Contact us today to discuss how we can assist in securing the compensation your business deserves.
Additional sources for similar information:
Insurance Information Institute (III)
Insurance Information Institute. “Business Interruption Insurance.” Insurance Information Institute, www.iii.org/article/business-interruption-insurance. Accessed 14 Mar. 2025.
National Association of Insurance Commissioners (NAIC)
National Association of Insurance Commissioners. “Business Interruption Claims: Understanding the Process.” National Association of Insurance Commissioners, 2021, www.naic.org. Accessed 14 Mar. 2025.
American Institute of CPAs (AICPA)
American Institute of CPAs. “How to Document and Calculate Business Interruption Losses.” American Institute of CPAs, 2020, www.aicpa.org. Accessed 14 Mar. 2025.
Claims and Litigation Management Alliance (CLM)
Claims and Litigation Management Alliance. “How Claims Adjusters Help Businesses Maximize Insurance Payouts.” Claims and Litigation Management Alliance, 2019, www.theclm.org. Accessed 14 Mar. 2025.
National Insurance Crime Bureau (NICB)
National Insurance Crime Bureau. “Negotiating Insurance Claims: Best Practices.” National Insurance Crime Bureau, 2021, www.nicb.org. Accessed 14 Mar. 2025.