Many businesses were forced to close or pause due to the restrictions caused by COVID-19 and are asking, “when is the best time for me to file a business interruption claim?”. Due to this, this leaves business owners in a unique situation and not sure what the next step is. These business owners have business insurance but aren’t sure when to file a business interruption insurance claim. In this article, we will address this topic and business interruption insurance claim related topics. 


Across the country, many businesses such as retail stores, fitness studios or gyms, bookstores, etc. are significantly impacted by COVID-19. Restaurants were limited to pickup and delivery only options causing a considerable decrease in profits for some of these establishments. As a business owner, the assumption is that filing a business interruption claim with your insurance company will provide some financial relief. But this is not always the case. 


Some businesses are discovering that collecting from insurance companies is nearly impossible – even if the business owner is paying for business insurance coverage. Insurance companies are arguing that losses due to the pandemic are not covered under this type of coverage. In return, this makes it extremely difficult for business owners to get relief from the insurance companies even if their business was forced to close by the state. 


Why Aren’t Insurance Companies Paying Out? 

The insurance companies argue that COVID related business shutdowns are not due to a physical loss or damage to the business. If insurance companies define business interruption this way, losses due to the pandemic will not qualify for an insurance payout. 


This business interruption definition is surprising to many business owners mainly because they have been paying for business interruption coverage for many years. Insureon estimates that business interruption coverage costs most small businesses $500 to $1,000 per year for this supplementary coverage. Typically this type of coverage is used when a business owner loses revenue due to a fire, flood, or other types of disasters that require the business to close temporarily. Most forms of business insurance cover the costs associated with renovations or repairs needed to reopen. However, business interruption insurance reimburses business owners for the lost income due to the business being shut down. This coverage covers a broad spectrum of costs, including lost revenue, payroll, taxes, rent payments, and the cost to relocate, if applicable. 


What should business owners do during this time? 

While business owners are waiting to see if there will be any financial support, many are left wondering what they should do during this time. As mentioned in the article, “Is COVID-19 covered by business insurance coverage” we recommend having an insurance expert review your insurance policy. 

If you don’t have a copy of your insurance policy, ask your insurance company to provide one. Once you have attained a copy of your insurance policy, we recommend reviewing this with an expert that understands the policy’s jargon. You can review the policy yourself, but you may do yourself a disservice if you don’t fully understand what’s stated in the policy.  


Next, begin building your insurance claim with an insurance expert. Be sure to document how COVID-19 has affected your business. If your business was forced to shut down, had a decrease in revenue, document this for your claim. Providing the insurance expert that you’re working with to build your claim, like a public adjuster, with reports, receipts, and income statements will help prove the financial impact COVID-19 has caused. If additional expenses have occurred because of the pandemic, document this as well. If your business was partially interrupted, but additional cleaning measures have been taken, this should be communicated in your claim. Overall, document any additional expenses paid due to COVID-19 for your claim. 


Our final suggestion is to work with an insurance expert to file a claim with your insurance company. Right now is the optimal time to file a claim, before businesses are allowed to resume regular business operations. Also, filing ahead of time will enable you to meet deadlines. 

How can I get help with my business interruption claim? 

Strategic Claim Consultants is a public adjusting firm focused on helping businesses with their claims or potential insurance claims. Not sure where to start? Strategic Claim Consultants are here to help. As certified public adjusters with years of experience, we can help you get the compensation you deserve. Contact us now so that we can understand your needs.