Business Interruption Claim: What You Need to Know

Posted in: Commercial Insurance, COVID-19

Lots of questions

A number of clients have been in conversation with us to inquire whether or not economic loss caused by disruptions tied to Covid-19 would be covered under their Business Interruption policy. Here is an outline of what you need to know.

Policy Stipulations

Unfortunately, these policies were designed by carriers to replace lost business income due to events that cause physical damage to a workplace that force a suspension of operations. Property damage is a required trigger in order to pay claims. Further, many policies expressly exclude damage caused by biological agents including bacteria or viruses.

Measures to take

There is great uncertainty regarding government measures that may potentially provide relief in response to the significant losses sustained by so many businesses. So, while businesses suffering economic loss due to Covid-19 impact on sales do not seemingly have rights to file business interruption claims, we advise clients to gather up key information or even filing a claim may be appropriate even if ultimately denied.

Below is the information needed to establish a claim with your carrier.

  • Name and address of the business
  • Name and contact information of your contact person:
    • Name and title
    • Phone numbers
    • E-mail address
  • Insurance company name
  • Property policy number
  • Policy effective dates
  • Location involved (if there are multiple locations on the policy and 1 or more are involved.)
  • Date of loss (date that business income was impacted)
  • Cause of loss (fire on premises, etc.)

Generally, the following categories of information will be required in the event that your insurance carrier determines that coverage is afforded under the circumstances that caused your business interruption.  The adjuster will assist you in clarifying exactly what is needed.

  • Profit and loss statements
  • Sales records
  • Income tax returns
  • Rent rolls
  • Payroll records

For your convenience we’ve gathered a list of commercial insurance carriers’ contact information and links to their web pages responding to COVID-19. If you have questions about your coverage or policies, please don’t hesitate to contact your designated PSA team member or reach out to me at gsimmons@psafinancial.com for more information.

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