Problems that Arise with Business Interruption Coverage Following a Hurricane
Hurricanes and other powerful storms not only damage a business’ physical structure, they can also cause businesses to halt operations. This means that a business owner is losing money while they try to replace damaged inventory and fix the building.
Unfortunately for the owner making a claim, many insurers drag their heels or try to deny coverage after a hurricane because so many businesses are negatively impacted. Below, our Daytona Beach business interruption insurance claims lawyers review some of the more common snags that arise when trying to make a claim.
Characterizing the Cause of Loss
Many policies have different available limits depending on the type of loss. Under the terms of your policy, it can matter enormously whether the loss is due to wind or flooding. There may also be different interruption waiting periods depending on the cause of loss. You need to fully understand your policy before you initiate the claims process, because a mistake early on could limit the amount of coverage.
Coverage for Civil Authority Closures
Often, the government closes highways to prepare for a storm, and these closures can limit access to your business. Depending on your policy, this type of preventative safety measure might not be covered, whereas shutting down the highway after a storm could be.
Measuring Economic Conditions after a Storm
Hurricanes tend to cause widespread devastation. This means that many, if not most, businesses in the geographic area will have to close. One key issue involves how to measure the business interruption losses that an insured has suffered.
Insurers might use one of two tests. One test looks backwards to measure the insured’s loss against its business levels before the hurricane or other catastrophe. This test overlooks the economy’s actual conditions post-catastrophe. Another test will actually try to figure out the business level had the insured been able to operate in the post-catastrophe economy. These tests frequently diverge and result in radically different coverage. You need an attorney who understands how insurers calculate your losses.
Contingent Business Interruption Coverage
This policy covers an insured’s lost income when suppliers or customers are damaged by a hurricane or other event. It is an important coverage to have. Although your business itself might not have suffered any damage, a key customer could have, which sinks your income, nonetheless.
However, proving this type of loss is difficult, since it is not your business that suffered direct storm damage. Furthermore, many policies contain only vague language about what you will need to prove to make a claim.
Many business owners are putting out fires following a storm—literally. With so much going on, it is easy to lose sight of the different time limits contained in a policy that an insured must meet to preserve their claim. Any extension might require a written request. Florida law provides some protections for insureds, but it is best to meet all deadlines if possible.
Contact a Daytona Beach Attorney Today
Hurricanes and other storms threaten the livelihood of small business owners. Let us help you. You can schedule a free consultation by contacting us at 386-252-5170.