Business Interruption Claim Preparation
Submitting and settling a business interruption insurance claim is a complex process that involves in depth analysis, a partnership with the insured business and broker, and the art of negotiation.
A complex business interruption claim must contain schedules and analyses that support the position of the business and they should be presented in an industry-standard format to expedite the insurance company’s review and to keep the focus on the substance of the claim. Many of our cases contain the following elements:
Business interruption/Lost business income
This is usually the measurement of lost profits and continuing expenses following some type of disaster or destruction. This is “disability insurance” for your business that will theoretically make the business financially whole after recovering from the incident.
Extra expense
Additional expenses required to continue operations (partially or fully) following a business interruption. These are the operational expenses that would not have been incurred “but for” the loss.
Contingent business interruption & contingent extra expense
These are losses in profitability due to lost sales or increased expenses due to physical damage at a client or supplier’s location. As a result, the subject business loses sales or is required to spend extra money to source items from other third parties.
Inventory, stock, and contents
Losses to inventory and stock may trigger a business interruption loss. This type of loss can affect inventory turns, resupply to clients, or trigger extra expenses such as forcing a business to purchase product from a third party to avoid loss of sales.
Construction delays and soft costs
When the loss occurs at a construction site, additional costs may be incurred due to rescheduling and delays. In addition, costs such as interest on a loan can push far beyond original plans. Finally, the property may be delayed in producing revenue.
Third-party liability
Not all losses are insured and sometimes the loss is the fault of a third party. In these cases, the same types of losses are quantified with the intention that they will be negotiated or potentially litigated to recover all losses from a tort.
Property and asset damage quantification
If your business interruption is the result of an event such as a fire, hurricane, or roof collapse, you may have extensive physical damage to your property or assets. We can provide the appropriate experts quantify your property and asset damage. We will work closely with these experts to see how their estimates and opinions affect the measurement of any business interruption losses. Depending on your particular needs, we can provide experts in the following fields, including:
- Construction scope and estimating
- Mechanical engineering
- Electrical engineering
- Industrial hygiene
- Soil and erosion
- Arboriculture