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