| Insurance Claim Tips for Business Owners | | | | 30-day increments. |
| | | | Extra Expense Coverage – Any expense incurred |
| Most business owners won’t necessarily think | | | | to mitigate your loss is considered an extra expense. |
| about their insurance coverage until a loss occurs and | | | | If your business had to relocate to resume |
| they need to file a claim. Uh, really, the time to | | | | operations in order to retain your customers, then |
| analyze your insurance is before you need to file a | | | | the costs of doing so would be considered extra |
| claim: Preview is always nicer than review. | | | | expenses. Be sure your policy provides an adequate |
| If you do suffer an insured loss, you’ll want to | | | | amount of extra expense coverage. |
| be cozy with certain aspects of your claim. Here are | | | | Proving the expenses incurred relate to mitigating |
| a few areas that cause the biggest disputes with | | | | your loss can be another area of contention. Be sure |
| your insurer. | | | | to keep the insurer aware of all expenses you are |
| Period of Restoration – This is the duration of | | | | incurring. Get written confirmation from the insurer |
| time your loss will be based upon. The period of | | | | that it will pay for those extra expenses. |
| restoration begins 72 hours after the physical loss or | | | | Calculating the Amount of Loss – |
| damage occurs. This is sometimes referred to as a | | | | Your policy should provide coverage for the amount |
| time deductible since coverage does not start until | | | | of net profit you would have earned had no loss |
| after the 72 hours expire. This period can be reduced | | | | occurred, as well as continuing normal expenses. |
| or eliminated with various endorsements. | | | | Determining the profit you would have earned can be |
| The end of the period of restoration can be difficult | | | | challenging. No wishful thinking allowed. |
| to calculate because it’s subjective. The date | | | | Two key components in determining what you would |
| theoretically ends at the earlier of when the property | | | | have earned are your sales forecast and your |
| should reasonably be repaired or replaced, or when | | | | previous year’s results. If you happen to suffer |
| the business is resumed at a new permanent location. | | | | a loss during a seasonal peak period of time but your |
| The insured may be given additional time to replace | | | | business was not meeting its current year sales |
| stock or supplies, or for a manufacturer, time is given | | | | projections, then you may find yourself in the middle |
| to bring production back to the pre-loss point. But | | | | of a dispute. |
| what’s a reasonable period of time to repair or | | | | Will you be able to prove you would have met your |
| replace the property? With no hard date for when | | | | sales forecasts during your period of restoration |
| the period ends, disputes arise. If you’re a | | | | even though you had not met them prior to the |
| tenant and your lease requires the landlord to repair | | | | loss? If your business is seasonal in nature, you will |
| the property, then you’re at the landlord’s | | | | need to work diligently to keep from losing your key |
| mercy. Your claim can be adversely affected if the | | | | customers as you may not have another opportunity |
| landlord is slow. These days, it’s quite possible | | | | to get them back until the following year. Can you |
| the landlord doesn’t have the financial ability to | | | | prove you lost them as a result of the insured |
| make those repairs. In this case, it may be best to | | | | event? |
| relocate, fast. | | | | If you suffer an insured loss, you should focus all of |
| After the property is repaired, it’s very likely to | | | | your attention on mitigating your loss and returning |
| take months before you return to your pre-loss sales | | | | to normal operations as quickly as possible. It may be |
| volumes. Unfortunately, this is outside the period of | | | | prudent to hire a professional public insurance |
| restoration and your coverage may be history. | | | | adjuster – a third party expert so you’re not |
| That’s why we recommend adding an | | | | forced to rely on your insurance claims agent – |
| “Extended Period of Restoration” | | | | to assist you in the preparation and calculation of |
| endorsement to your policy to provide coverage in | | | | your loss. That way you can focus on your business. |