How to File a Business Interruption Claim for the Best Settlement

Written by Rami Boaziz on October 23, 2018 at 12:24 PM.

Knowing you have business interruption insurance is reassuring after a disaster, but there’s still a lot of uncertainty. How do I file the business interruption claim? Will it be approved? How soon will I get the money? On top of that, you need to focus on getting your business up and running again.

We’ve presented several tips to help you successfully file a business interruption claim that gets approved quickly – and for the highest settlement possible.

Document Everything

Thoroughly examine and document all physical damage. Take photos and videos before any clean-up or repairs occur as quickly as possible. You need to prove that the physical damage is substantial enough to cause the interruption.

You may want to engage a construction expert to walk through and document damages in case there are issues that you don’t realize are a significant problem. Stellar Adjusting has experienced contractors and engineers on our team. They can be available within minutes of an emergency to promptly evaluate the damages. Plus, the inspection is free.

Make Initial Repairs

After a disaster, protect your property from further damage by making temporary repairs. Just be careful to save the damaged parts in case the insurance company wants to examine them. Also be sure to save receipts so you can submit them for reimbursement to your insurance company. Payments for temporary repairs are part of the total settlement.

Making these initial repairs in good faith will help get your business back on track more quickly and show the insurance company that you want to expedite the process as much as they do. Once the insurer investigates the claim and gives an early indication of the coverage, you can discuss expensive repairs, such as whether to replace a damaged roof, or whether to tear down and rebuild.

Understand Your Policy

Understanding the definitions in your policy is a critical first step. The specific language of your business interruption policy determines how much you can recover after a loss. For example:

— Most commercial property insurance covers business income loss by adding an addendum to the primary policy. Therefore, most policies require that your business property sustain physical loss or damage to be eligible.

— Business interruption coverage generally extends at least until the “period of restoration” ends, which is when the property has been repaired or replaced. Some policies provide “extended business income” coverage, which provides additional coverage while you catch up to normal operations after the “period of restoration.”

These are just two high-level examples. Pay attention to the forms of coverage, covered locations, covered causes of loss, exclusions, and the loss calculation methodology. Having clarity on this before you contact the insurance company gives you the advantage. Being knowledgeable and prepared will ensure that you don’t provide inconsistent information that could affect future decisions by the insurer.

If you have an insurance broker, they can be a great resource to translate the language for you and make sure you understand exactly what your policy covers. If this isn’t an option, public insurance adjusters are experts in the details and language of insurance policies, as well as filing and adjusting claims. Stellar Adjusting offers a free claims analysis to get you started. Plus, they don’t get paid unless your claim is approved, so there’s no risk.  

Submit a Preliminary Claim

Although you want to get the claim submitted as quickly as possible after the incident, it’s often challenging to assess the impact of a business interruption loss right away. You may not be sure how long repairs will take, how successful they’ll be at mitigating the loss, and how to quantify the loss. It’s helpful to prepare a preliminary estimate of loss amount within 30 days. This estimate should be clearly submitted as “preliminary” and updated as more information becomes available.

Present a Solid Case

Take a proactive approach from the beginning. Just filling out the standard forms and answering the insurance company’s questions may not (and probably won’t) accurately convey your business’ damages and income loss. You are the expert on your business. Someone unfamiliar with your industry may make assumptions that will lower your potential reimbursements.

Make sure you’ve thoroughly documented the losses and how it compares to your regular business operations. This list isn’t exhaustive, but be prepared to show:

— Your business Income before and after the loss

— New expenses of keeping your business operating in a temporary location during the interruption

— Expenses that continue regardless of a business shut-down, such as rent or mortgage payments, utilities, taxes, insurance, loan payments, and suppliers

— Inventory of damaged or destroyed items with copies of any receipts

— Cost and receipts of all temporary repairs

Submitting an accurate, detailed claim is crucial to getting the right about of money from an insurance company to cover a property loss. Remember, even the best insurance companies will never voluntarily pay more than an amount claimed. You need to be sure you’re claiming the correct amount.

You may need the assistance of an accountant, estimator, or appraiser to create a professional, clear presentation based on benchmarks from your industry and accurate estimations. Stellar Adjusting has these professionals on staff and ready to assist so you don’t have to spend time identifying experts to help.

Stay in Communication with the Insurance Company

Both parties have a mutual goal – to expedite the property repairs and return the business to its full operations. Building a positive, helpful relationship with the insurance company will help them better understand your immediate concerns. Let the insurance company know about your need for cash flow, urgent repairs to property or equipment, or other demands you face. This could increase your chance of receiving a cash advance.

Track all your communications with the insurance company during the claim process. Keep copies of all letters and emails sent or received to the insurer or its representatives. To avoid misunderstandings, ask the insurance company to request documents in writing.

With all that you have going on after a disaster, it can be hard to stay on top of all this back and forth. That’s why having a public adjuster can be so helpful. Stellar Adjusting has a web-based portal that allows our clients to monitor and review their claim status and development throughout the entire process.

Advocate For Your Case

There is plenty of room for ambiguity in a business insurance claim. If you disagree with the insurer’s interpretation or handling of the claim, speak up. Be prepared to take a more aggressive position if necessary.

You should not sign a final settlement until you completely understand the details of the offer. To save time and money, insurance companies want you to settle quickly. Don’t be pressured. It will benefit you tremendously to make sure you’re entirely comfortable with the settlement before signing.

If you’re feeling uncertain, a qualified public adjuster is just what you need during a stressful time. Negotiation is one of the most important roles of a public adjuster. An adjuster’s in-depth knowledge of insurance terminology, experience with similar claims, and total focus on your case takes the weight of a business interruption claim off your shoulders.

Using these strategies will position you well for getting a settlement that’s fair and fast. If you need help navigating the process, call Stellar Adjusting at (305) 570-3519 for a free policy analysis and property inspection. Our team of professional insurance adjusters can ensure a positive outcome.