In my previous posts, What is Business Interruption Insurance? and 5 Business Interruption Insurance Requirements, I have covered what this type of insurance is and the requirements needed to file a claim. I would say by now we all have a clear understanding of how this insurance policy helps your business if there is damage to the property, such as fire damage or a ton of bricks falling from a roof and damaging the walkway. These examples qualify for a business interruption insurance claim.
Often, you will need to hire an adjuster or an insurance attorney to help with the claim process. While business interruption insurance covers you sometime the insurance company does not readily hand off the money. Let's examine the actual filing process so you receive what you are due.
The Claim Process:
- Channel your inner Sherlock Holmes and do a thorough investigation of the damage. After filing a claim, an adjuster should meet with you a few days after the damage has happened. The sooner the better to assure nothing is disrupted from the scene. Especially if you need immediate funding or urgent services, such as repairs or water extraction to prevent further damage. Or for immediate funding for operations such as covering payroll or any operational expenses that need funding.
Helpful Tip: When filing a business interruption insurance claim, prepare to address a long, exhausting list of questions. This is where professional assistance should be leveraged.
- Open up the filing cabinet and start pulling out all those "I will never use these, but going to hold on to them just in case, because you never know when you might need them" files. You are going to be required to produce records of your daily, weekly, monthly income, expenses, payroll, and tax returns. Any records you keep during the ordinary course of business, expect to show them to the insurer.
Key documents to have:
- Financial Statements
- Payroll Records
- Sales Records
- Copies of equipment leases
- Records of continuing expenses
- Inventory Records
Helpful Tip: In many cases, business records usually are damaged or lost. It’s a good idea to have copies of all your documents and have them stored off-site.
- "Could I have that in writing?" Require the insurance company sends all and any communication, in writing. This is to avoid any miscommunication and protect you from future problems.
- Document! Document! Document all communication with your insurance company and any vendors during this process. Keep letters, emails, receipts, and copies of letters.
That's a wrap!
Now we know the What, Why, and How.
The What: Business Interruption Insurance
The Why: Insurance for business owners that covers temporary shut downs due to physical damage to property.
The How: Add this policy to current property insurance plan for your business. If needed, make sure the damage fits the requirements stated in the policy and then file the claim.
As a business owner, you plan for many scenarios but you don't always plan for a pipe randomly bursting, causing you to temporarily close your doors.
Business interruption insurance makes up for that financial loss.
If you have questions about an insurance claim or want to know more information on business interruption insurance, schedule time to talk by clicking below.