As a business owner, keeping your doors open to customers is essential to your operations. Closures equate to lost business, particularly for those in service-based industries. A storm like hurricane Matthew, which closed business for multiple days, created lost sales that may never be recovered. Katie Nussbaum discussed this very issue in her article in Friday’s edition of the Savannah Morning News, which outlined the difficulties that hurricane Matthew created for restaurants and hotels.
At HunterMaclean, we have heard from our clients that they have suffered losses as a result of the storm and need to quickly determine their options for recovery. If you had an interruption to your operation during the hurricane, you, too, may have insurance that is designed to protect you in this very circumstance.
In simple terms, business interruption insurance protects businesses against losses that occur as a result of a covered event that causes a shutdown of the business. The purpose of business interruption insurance is to make the business whole following a covered event.
There are various types of business interruption insurance, and determining the type of insurance you may have is the first step in the process of recovering your business losses. Business interruption claims are often complex legal and accounting exercises to determine the available coverage and loss of profit your business suffered as a result of the interruption.
To determine whether you have coverage for an interruption of your business, you must first gather copies of your insurance policies to determine what coverage, if any, you are provided for business interruptions. If you don’t have copies of your insurance policies, contact your insurance agent, as he or she should be able to obtain the needed documents for you. Ask questions about what coverages you have available.
Making a business interruption claim will also require you to gather relevant financial documents to establish the extent of your loss. These often include profit and loss statements and a schedule of your business expenses. Assemble documents for the year at issue, as well as previous years, if possible.
An accountant or business lawyer can be a valuable resource for you in evaluating your coverage and ensuring your business interruption claim is properly adjusted to make the most of the insurance you have purchased.
Finally, it is important to act quickly in the event you do have a covered claim. Your insurance coverage likely requires timely notice of the claim to your insurance carrier. Additionally, statutes of limitation can limit the time in which you can pursue your claim in court, should you need to do so. Acting quickly in pursuing your claim can help you avoid these timing pitfalls.