If a business has insurance coverage for business interruption in place, the question of whether or not its losses will be covered in the event of such an interruption, will depend on the policy itself.
The period of coverage may not necessarily start from when the business closed operations. There may be a brief waiting period before the policy is put into place. How long the coverage will last can also vary. Some have a limited period of a set number of days, while others last until a civil order has been granted to resume operations again.
The type of losses that are covered in that period are also policy specific. A business may recover the total reduction in net income and their normal operating expenses. Businesses must be able to prove these losses, and any/all of the following documents will be helpful.
Keep in mind that despite having insurance, businesses have an obligation to mitigate or lessen their losses to the best of their capability. For example, food establishments that are no longer allowed to serve dine-in patrons, may opt to open a take-out only or delivery service. Other types of business can see if they are able to conduct their trade virtually. Can you attempt to sell your product online, or operate via live webcam.
If your insurer is covering you for your losses, we ask that you check your policy to see how long and for what amounts are you insured for. Also, be prepared to have your business documents ready. Should you run into any difficulties with interpreting your policy or dealing with your insurer, please feel free to contact one our lawyers.
Written by: Douglas Chiu