What is Business Interruption Insurance?
Business interruption insurance is coverage to protect a company's earnings and potential earnings when it cannot not operate normally because of “interruptions” caused by certain physical losses or damages to the company's real or personal property.Know and Understand Your Business Interruption Insurance Policy Limitations
Like all insurance policies, individual business interruption insurance policies can have strict limitations and provisions hidden in the fine print. It is important to read the policy thoroughly so that you fully understand your coverage. For example, post 9-11, many insurance companies now exclude losses caused by acts of terrorism. Some may also exclude “acts of God” including natural disasters.
An example of how tricky insurance policies can get: if an earthquake causes a fire or flood from a broken water main, and you do not have coverage for earthquakes (and, in some cases even if you do), the damage from the fires and floods attributed as a secondary issue to the earthquake might not be covered.
Tips For Filing a Business Interruption Insurance Claim
Most carriers also have time limitations on filing claims and typically require a sworn proof of loss within 60 days of the insurers' request or 60 days of the date of loss.
Expert insurance attorneys William Shernoff and Douglas M. Carasso recommend, “If losses are not completely known within the 60 days, it is best to file the proof of loss within this time limit and amend it when more information is available.”
Sources:
William Shernoff and Douglas M. Carasso. Los Angeles Daily Journal. In Recovery: Business-Interruption Insurance. November 15, 2001.
