Business Interruption Claims after a Hailstorm: What Is Covered & What You Need to Know When Filing a ClaimAugust 28, 2017
Business interruption insurance can protect a business’s earnings when disaster strikes and forces a business to shut down for some period of time. Typically offered as an endorsement to property insurance or a business owner’s policy, business interruption insurance is intended to restore a business to the financial status it would have been in had the disaster and losses not occurred.
While business interruption insurance can provide an important safety net, there are some important caveats and limits associated with this coverage. Understanding those restrictions and how these claims work is critical to protecting your business and positioning a business interruption claim for success.
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What Business Interruption Insurance Can Cover
A valid business interruption claim generally has to involve an actual loss of business income due to the suspension of business operations arising from a covered disaster. Here, it’s important to be aware that:
- Actual loss means the physical damage or loss a business has sustained. This may include, for example:
- Lost profits due to the closure of the business – For instance, if a business has to shut down while the property is being fixed, the profits lost during this shutdown could be covered by these claims.
- Temporary relocation costs – This can cover the extra expenses businesses take on when they set up and operate from a temporary location (while their permanent location is being restored).
- “Extra” expenses – These can include other necessary and reasonable expenses the business incurs as a result of the covered disaster. These expenses typically have to be associated with running the business during the restoration period.
- The “restoration period” is generally defined as the length of time needed to fix, rebuild, or replace the damaged property. As such:
- This period starts on the date of the disaster (i.e., when the damage occurred).
- This period continues until the property has been restored, without undue or unreasonable delay. In fact, as long as the policy is active when the disaster strikes, the business interruption insurance should cover the restoration period even if the policy expires during the period (at a later point).
So, if your property insurance covers hail damage, you have business interruption insurance and hailstorm damage forces your business to shut down for some period of time, you can file a claim under your property insurance policy to cover the expenses and losses your business sustains as a result of the hail damage.
Filing a Business Interruption Claim after a Hailstorm: What You NEED to Know
As you prepare to file a business interruption claim, here is what you need to know to protect the value and strength of your claim as you proceed:
- Your documentation matters – To prove the extent of the business-related damage and losses caused a hailstorm, various documents are important to retain and present with your claim. These can include (but may not be limited to):
- Business income records from previous (and recent) years
- Damage reports and property repair bills
- Rental agreements, utility bills, and other documentation related to setting up a temporary business location
- Documentation regarding the dates of closure for your business.
- Business interruption insurers are typically focused on limiting payouts – Simply having business interruption coverage does not guarantee that your claim will be approved or that you will be offered a settlement that covers all of your losses. The main reason is that insurance companies tend to be focused on protecting their profits by avoiding payouts whenever possible.
- A lawyer can be an important ally when it is to file a business interruption claim – Given the above point, it can be invaluable to have an experienced attorney on your side, protecting your claim at every phase of the process. A lawyer can help you gather all of the evidence necessary to support your claim, help you avoid common mistakes that could hurt your claim, and advocate your entitlements to compensation.
Get Priceless Answers about Your Potential Business Interruption Claim: Contact a Hail Damage Claim Lawyer at the Amaro Law Firm
A hail damage claim lawyer at the Amaro Law Firm is ready to review your potential claim and provide you with the representation and guidance necessary to maximize your payout.
With previous experience in insurance defense, the attorneys at the Amaro Law Firm know the tactics insurers use to try to reduce and deny claims. We also know how to undercut these tactics, advance our clients’ rights, and help them obtain the benefits they deserve. Let us put our insight and skills to work helping you successfully resolve a hail damage business interruption claim.
From offices throughout Texas, we represent contractors, business owners, homeowners, and others in various types of hail damage claims. Our record of success and exceptional representation in these claims has earned us 5-star ratings on Google and Facebook.