Whether you operate a retail store, provide a service to customers, or entertain guests, your Orlando business likely relies on consistent supply chains, repeat customers, and predictable revenue. When an unexpected event disrupts your business, the financial consequences can be catastrophic. Business interruption insurance is designed to address that risk, but insurance companies frequently try to delay, undervalue, or outright deny claims.
Understanding how business interruption insurance works is essential for an Orlando business owner, because if your business is forced to close because of an unforeseen event, such as a hurricane or tropical storm, you will lose crucial revenue but still be required to pay all of your bills. The team at Malik Law understands how important it can be for a business to recoup losses caused by an unforeseen event. If you have specific questions of concerns about a business interruption insurance claim, contact the team at Malik Law today by calling 407-500-1000 so we can discuss your legal options.
What Is Business Interruption Insurance?
Business interruption insurance, sometimes referred to as business income insurance, is intended to replace lost income when operations are suspended due to a covered event. Unlike property insurance, which focuses on physical damage to buildings and equipment, business interruption coverage addresses the financial impact of a covered event, which may include lost profits, continuing expenses such as rent and payroll, and in some cases the cost of operating from a temporary location.
In an area that routinely faces risks from hurricanes, severe storms, and water damage, business interruption insurance can be even more important to a business. When a covered loss forces temporary closure, business interruption insurance can mean the difference between a successful recovery and a permanent shutdown.
What Type of Events Typically Trigger Business Interruption Insurance Claims?
Although every policy is unique, the terms of most business interruption insurance policies require the insured to show a physical loss or damage to the property before business interruption coverage applies. For an Orlando business, a hurricane or tropical storm might cause wind damage, flooding, or even fires that can trigger coverage. Your policy might also cover damage to neighboring properties or civil authority orders that restrict access to your business. In Orlando, a mandatory evacuation order in anticipation of a hurricane or nearby road closures following a tropical storm can prevent customers from reaching your business, which may qualify as a covered event. Because the terms of a policy can be confusing, it is always best to have an Orlando business interruption insurance claim attorney review your policy if you are uncertain.
What Losses Are Typically Covered by a Business Interruption Insurance Policy?
The goal of a business interruption insurance policy should be to put your business back in the same financial position it would be in if the triggering event had not occurred. To accomplish that goal, business interruption insurance typically covers losses such as:
- Income: Net income the business would have earned, based on historical financial records.
- Operating Expenses: Ongoing operating expenses, such as utilities, rent, loan payments, and employee wages.
- Extra Expenses: If you are forced to rent temporary space because your permanent space is uninhabitable because of a covered event, your policy may cover the cost of renting temporary space. It may also cover extra costs such as expedited shipping fees or additional advertising to inform customers of reopening plans.
Understanding the “Period of Restoration”
An important aspect of a business interruption claim is known as the “period of restoration,” and refers to the time frame during which losses are covered, typically beginning on the date of the covered loss and ending when the business should reasonably be repaired or able to resume operations. Not surprisingly, exactly when this period ends is a frequent source of disputes when filing a business interruption insurance claim.
Common Business Interruption Insurance Claim Issues
Despite being marketed as a crucial safety net for businesses, insurance companies frequently scrutinize business interruption insurance claims closely and issues may arise when you file a claim, such as:
- Triggering Event Disputes: Your insurance company may question whether an unforeseen event qualifies as a covered loss.
- Physical Loss: If the policy requires the business to suffer a physical loss for coverage to apply, you may run into problems if losses were caused by damage to nearby businesses or infrastructure but not directly to your business.
- Period of Restoration: Disputes over how long the interruption period should last are common.
- Undervaluing Claim: Insurers may also challenge revenue projections, arguing that losses are overstated or unrelated to the covered event.
- Unreasonable Delays: Your insurance company may inundate you with requests for documents, paperwork, and financial records, delaying the payment of your claim.
- Denial of claim: Your insurance company may outright deny your claim for a variety of reasons, including the assertion that your losses were caused by factors that are not covered.
How to Document Your Losses for a Business Interruption Insurance Claim
To increase the likelihood of getting your business interruption insurance claim paid in full and without unnecessary delays, gather financial records, such as profit and loss statements, tax returns, payroll records, and sales reports, before filing your claim. These documents are typically used to establish the business’s baseline income and ongoing expenses. If you experience an unreasonable delay in the payment of your claim or your insurance company fails to pay your claim in full, it is in your best interest to contact an experienced Orlando business interruption insurance claim attorney right away.
How Can an Orlando Business Interruption Insurance Claims Attorney Help?
When a business interruption claim is delayed, denied, or undervalued, it can cause catastrophic financial chaos for a business. An Orlando business interruption insurance claim attorney can help by holding your insurance company accountable to the terms of the policy. Unfortunately, insurance companies are represented by teams of professionals whose primary objective is minimizing payouts. The team at Malik Law can level the playing field and improve the likelihood of a fair outcome.
A business interruption claim attorney at Malik Law will analyze your coverage, investigate the claim, gather evidence, and negotiate with adjusters to achieve a favorable out-of-court settlement when possible. If a settlement is not forthcoming, we will aggressively litigate your claim in court. Contact the team at Malik Law today by calling 407-500-1000 so we can discuss your legal options.
