What You’ll Need to Make a COVID-19 Business Interruption Insurance Claim

Business owners put everything they have into making their dream come true. They put in countless hours of hard work and make major personal sacrifices to help their business succeed. But sometimes, despite all those efforts, a time might come when they need to temporarily shut their business down because of circumstances beyond their control. A fire or storm could damage a building and render it unsafe for employees and customers until it’s repaired. Or, as we’ve seen very recently, a pandemic could result in many types of businesses being forced to close or operate on a limited basis in an attempt to reduce the spread.

Even if a closure is temporary, it can still place a lot of strain on a business. To help protect everything they’ve worked so hard for, it’s business owners commonly have insurance policies that include business interruption and/or civil authority coverage. These types of insurance coverage are meant to cover things monetary losses that are incurred during a temporary closure. 

But with so many business owners making business interruption claims because of the coronavirus pandemic, insurers are trying their hardest to get out of paying as many of those claims as possible. They’ll look for any reason at all to deny them. To help build a strong foundation for your claim, you need the right documentation to demonstrate your losses. If you’re getting ready to make a business interruption claim, here are some of the most important things you’ll need. 

Proof of Ongoing Business Expenses

Just because your business is closed or operating on a limited basis, that doesn’t mean your routine operating expenses are going to be put on hold until things go back to normal. Employees need to be paid. Landlords still expect rent to be paid and banks still want those mortgage payments. Utility bills are going to keep coming in. These types of expenses are some of the key things business interruption insurance is intended to help you cover. 

Past Business Records

In addition to your ongoing business expenses, business interruption insurance can help cover the revenue you lost while your business was closed. To prove your revenue losses, you’ll need to have documentation to reflect what your typical business levels are. This can include things like two year’s worth of profit and loss statements, production reports, and cost accounting reports. 

For example, the timing of the shutdowns and restrictions related to the pandemic meant that many businesses lost a substantial amount of business during what is typically a busy time of year. Limo rental companies, suit rental shops, and catering companies all lost out on the business that comes along with events like graduations, proms, and weddings. Businesses tied to travel and tourism also lost out on people being forced to cancel their planned spring break trips and summer vacations. Those business records from past years would help demonstrate those seasonal patterns. 

Proof of Loss Mitigation Efforts

Regardless of why a business is closed, insurance carriers want to see that you’re taking reasonable steps to help minimize your losses. For instance, if a business had a fire but they could continue working from a temporary location, business interruption insurance could help cover the costs of securing and moving into that temporary location. 

In a situation like the COVID-19 crisis, moving into a new physical location won’t help a business get back on track, but they may be able to try new ways to keep business going. However, those new ways of doing business often come with their own added costs. In some cases, this might be something relatively simple like dine-in restaurants spending more money on takeout containers so that they can offer to-go and delivery orders. But other types of businesses might need to make bigger changes to their operations. For example, since gyms and fitness centers are facing an extended period of being shut down, they might need to purchase some video equipment so they can produce higher quality videos for virtual classes than they’d be able to make with a webcam.

Proof of Additional Expenses

Even if businesses are able to keep going by making minimal changes to their overall operations, there may still be some extra expenses involved that weren’t part of their pre-pandemic budget. Often, they need to purchase PPE for employees or create hand sanitation stations. Or maybe they need to purchase more cleaning supplies than they used to or need to hire a cleaning crew to disinfect their space.

Records of Confirmed COVID-19 Cases at Your Business

Have you or any of your employees tested positive for COVID-19? Or are you aware of any customers who visited your business at a time they were contagious? If so, any documentation you can provide to support that may be helpful. Some business owners have reported that their claims for business interruption benefits were denied because there were no confirmed cases at their business, so providing documentation of known cases at your business makes it harder for insurers to deny on those grounds. 

Need Help with a California COVID-19 Business Interruption Insurance Claim?

Whether you’re still in the process of getting ready to make a claim or have made a claim and been denied, working with a lawyer can help give you the chance of getting the benefits you need. The team at The Wallace Firm has a track record of success in taking on insurance companies and holding them accountable and are now working with California business owners to help them with their business interruption claims. These cases are being handled on a contingency basis, so there won’t be any fees unless we succeed in helping you with your claim. Contact us today to get started.