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The Importance of Business Interruption Insurance

Coronavirus crisis. CLOSED message board near bar, cafe, shop on empty street. Corona virus COVID-19 flu disease global pandemic outbreak, business impact, isolation, quarantine, stay at home concept

Business interruption insurance is a vital bit of coverage for any business that operates out of a physical location, such as a restaurant, an office building, or a factory. Business interruption insurance is meant to financially protect companies in the event that a serious incident prevents the business from continuing to operate for a period of time, and covers more than the value of the physical property and assets lost in a disaster. If you are facing business interruption as a result of the coronavirus pandemic or another disaster and you need help securing the coverage you are owed, call an experienced and effective California business insurance denial attorney for help pursuing your claims.

What is Business Interruption Insurance?

Business interruption coverage is not typically a separate policy. Instead, it is optional, additional coverage under a broader property insurance policy. Property loss insurance covers damage to the premises as well as the assets contained within, such as when a fire destroys a building and all the tables, chairs, computers, refrigerators, ovens, and other assets contained inside. Property insurance covers fires, floods, mold, earthquakes, and other incidents.

Business interruption insurance covers the revenue lost by the business for the duration of time that the restaurant or other business cannot operate because the building is closed. Estimated earned revenue is based on a calculation of the average daily or weekly income using the past year’s financial records. Depending on the wording of the contract, a policy may even cover business closure as a result of a personal injury lawsuit. The policy can also cover extra expenses incurred as a result of the closure, anything that exceeds normal operating costs, as well as continued payment for things like electricity and internet even while the business remains closed. This coverage can be useful when employees are able to continue working remotely from other locations.

The policyholder can choose the amount of coverage; getting coverage for at least a week of lost revenue, if not more, is a prudent step. Many circumstances can put a business out of commission for several weeks or more, which can prove fatal to many small enterprises. Many small businesses cannot survive a closure of several weeks or more without any revenue; business interruption insurance can help keep the business afloat.

When Does Business Interruption Coverage Apply?

It all depends on the language in your particular insurance policy. Most insurance providers are blanketly denying business interruption claims, and legal battles are cropping up around the country.

Help With Business Interruption Claims in Southern California

If you have been denied a business interruption insurance claim in California and would like an attorney to review your insurance policy at no cost to you, call the dedicated insurance coverage attorneys at Drake & Drake, P.C., for a free consultation at 818-914-4055.

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