Business Interruption Insurance Claims and Coverage Dispute
Business interruption insurance is intended to provide coverage for certain losses of income and ongoing expenses when business operations are disrupted by a covered event. Disputes may arise when an insurance company denies coverage, limits the scope of benefits, or disputes the amount of loss claimed.
Burts Law represents policyholders in disputes involving business interruption insurance claims, assisting clients in understanding policy provisions and evaluating options when disagreements with an insurer arise.
What Is a Business Interruption Insurance Claim
A business interruption insurance claim typically arises when a business experiences a suspension or reduction of operations due to property damage or another covered cause of loss. Coverage may apply to lost income, continuing expenses, or other losses as defined by the policy.
Business interruption coverage is governed by the specific policy language, endorsements, and conditions, and not all operational disruptions are covered.
Common Situations Involving Business Interruption Claims
Business interruption claims may arise in a variety of circumstances, including:
- Closure or reduced operations following property damage
- Loss of income due to fire, storm, or water damage
- Delays in reopening caused by covered repairs
- Civil authority orders restricting access to premises
- Supply chain or dependent property disruptions, if covered
Each claim is evaluated based on the cause of loss, the policy terms, and the nature of the interruption.
Reasons Business Interruption Claims Are Disputed
Disputes over business interruption claims may involve coverage, causation, or calculation of loss. Common issues include:
- Disagreements over whether the interruption was caused by a covered event
- Application of policy exclusions or waiting periods
- Disputes over the period of restoration
- Challenges to income calculations or expense documentation
- Denials based on policy conditions or endorsements
Evaluation focuses on the policy language and the facts surrounding the interruption.
Business Interruption Coverage Considerations Chart
| Coverage Issue | General Consideration |
| Covered Cause of Loss | Often tied to property damage coverage |
| Period of Restoration | Defines the timeframe for covered losses |
| Income Calculation | Based on historical financial data |
| Continuing Expenses | May include rent, payroll, or utilities |
| Civil Authority Coverage | May apply in limited circumstances |
Understanding these provisions is often central to evaluating a dispute.
Calculating Business Interruption Losses
Business interruption claims often require analysis of financial records to assess lost income and continuing expenses. Disputes may arise over projected revenue, expense offsets, or the methodology used to calculate losses.
Differences in calculation methods can significantly affect the amount claimed or paid.
FAQs: Business Interruption Insurance Claims
Does business interruption coverage apply without property damage?
Coverage often depends on whether the policy requires physical damage to property. Policy language controls.
What expenses may be covered under business interruption insurance?
Covered expenses may include lost income and certain ongoing operating expenses, depending on the policy.
How long does business interruption coverage last?
Coverage duration is typically limited to the period of restoration defined in the policy.
Can an insurer dispute the amount of lost income?
Yes. Disputes may arise over how income and expenses are calculated.
Do business interruption claims involve coverage disputes?
Frequently. Coverage questions often arise regarding causation, exclusions, or policy conditions.
How Business Interruption Claims May Intersect With Other Insurance Disputes
Business interruption disputes may overlap with property insurance claims, coverage disputes, valuation issues, or allegations of improper claim handling. Evaluation often involves reviewing multiple aspects of the policy and claim process.
Contact Burts Law
If you have questions about a business interruption insurance claim or a dispute with your insurance company, contact Burts Law to schedule a consultation to discuss your situation and available options.
