Business Income Loss - What to do when a disaster strikes
As a business owner, your income pays your business and personal bills and provides a financial safety net for you and your family. If your business is forced to close because of a disaster, it can cause some severe hardship for everyone. Things like stress and worry, lack of finances, a possible lack of coverage in health insurance, and other hassles can make the recovery period a nightmare.
Business interruption insurance – most commonly known as business income insurance – covers income losses after a business closure caused by some form of physical damage. The damage must be caused by a covered peril such as a hurricane, fire, or earthquake. But the coverage doesn’t kick in immediately.
Here’s what to do after a disaster strikes:
- Review your policy and determine if your loss is covered. Many policies cover only specified perils and disasters, or have exclusion clauses that may cause your claim to be denied or underpaid. Check to see whether your policy specifies a waiting (or “elimination”) period, and if it has or hasn’t been met.
- Contact your insurance provider promptly. Inform your representative of any business income losses you’ve incurred. Let them know that you believe your loss is covered by your insurance, and request a form so you can submit a claim. When filling it out, provide details such as the date and the extent of your losses. Many policies have time limits regarding when you can submit a claim, so do this as soon as you can.
- If your insurance company requires a sworn proof-of-loss statement, fill this out and submit it. Detail the event and loss. This must be sworn to be true, and there are penalties for perjury. Submit both this form and your claim to your insurer.
- Actively mitigate your losses. This can mean finding a replacement property or another location for your business.
- Gather all your documents that deal with your finances, and document all the expenses you incurred due to business closure. Use any tax returns, sales tax returns, contracts with businesses, budgets, or financial statements that may help you calculate the projected income of your business.
Insurance companies are well-known for taking advantage of policyholders during times of disaster.
This causes many business owners to go bankrupt. Many will work harder to deny a payout than they will to accept your claim. They will use improper methods to calculate your losses so they don’t have to pay, or will delay the payment of your business income loss claim. Your business is vital to you and your family. You turned your dream into a reality, and should have the chance to recover your losses and get back to business.
If your business must close temporarily because of a fire, natural disaster, or other catastrophe, your business interruption insurance should be there to help you through this challenging situation. But you may need an experienced attorney to help you recover and re-open your business. If your claim was denied or underpaid, contact Louis Law Group at (954) 676-4179 for a free no-obligation consultation or case evaluation. We will stand up for you and get you the settlement you rightfully deserve.