Loss of Income Insurance Claims | Read The Fine Print

loss of income insurance claims-bulldog adjusters-business interruption insurance

Loss of income insurance claims are covered under business interruption insurance. When your business is affected by natural disaster or a water starts leaking from the ceiling, you may need to close your doors. Of course, this means that you’ll be unable to service valuable customers. This loss of business is called ‘loss of income” and affects your bottom line.  Business interruption insurance is also known as business income insurance. The most common reason for loss of income insurance claims are power outages. In the United States, 72% of loss of income insurance claims is due to electrical problems that render a building dark and without electricity.

You won’t be surprised to learn that over 50% of all loss of income insurance claims can be blamed on computer hardware problems. Just under this reason at 46% is a telecommunications failure. Actually, only 29% of loss of income insurance claims are due to natural disasters. Floods, lightning storms, earthquakes, hurricanes, tornados and other natural disasters combined attribute to less than software problems, telecommunications failure, computer hardware problems and power outages.

Loss of Income Insurance Claims | Read the Fine Print

I got a call from a clam shack outside of Orlando. Mark, the business owner, had to close his doors when Hurricane Irma barrelled through Florida. As if that wasn’t enough, his business didn’t receive the level of revenue they had prior to the storm. It seemed that many homeowners were struggling to repair their properties, they were waiting to see when schools would reopen and they were spending their funds elsewhere. While Mark doesn’t dwell on the reason his restaurant stayed empty for 3 weeks following Irma, he does home to file loss of income insurance claims for the revenue he lost because of the storm.

The Sun Sentinel featured a man on the other side of the coin. “A lot of people thought they had coverage,” said Jeff Grady, CEO of the Florida Association of Insurance Agents. “But they didn’t read their policies or have it explained to them.”

Why is it that less than 5% of all claims filed after Hurricane Irma are loss of income insurance claims? Many state insurance regulators would say that many business owners aren’t covered, or they don’t understand their policies so they are unsure whether or not they’re covered for loss of income.

Loss of Income Insurance Claims | Exclusions

Many Florida business owners who were in mandatory evacuation zones were upset to learn that they are not covered for loss of business due to one thing: Exclusions. If you opted out or did not specify in your policy that loss of income insurance claims should be covered, then you’re not covered. This includes power outages that affected entire areas of your city. Many Florida business owners expected coverage after a natural disaster that rendered their business closed and even their homes damaged. While their homes were covered under their home insurance policy that included natural disaster, many businesses were not covered for loss of income.

According to a press release quoting Sean Kevelighan of the Insurance Information Institute:

“Businesses are extremely important to the U.S. economy because they provide both goods and services and jobs, so it’s vital they are up and running swiftly after a disaster,” said I.I.I. CEO Sean Kevelighan.  “As an economic first responder, the insurance industry is there to help businesses bounce back from disasters like Hurricane Irma.”

Loss of Income Insurance Claims | What’s Covered & What Isn’t

In order to receive a settlement when filing loss of income insurance claims, you must also have proof of physical damage to your property. Business owners should also note that getting your Business Owners Policy or your Commercial Multi-Peril policy in order to secure a loss of income claim must be done at least 48 hours prior to the physical damage having taken effect. This waiting period between the purchase of your policy and the implementation of its effects is approximately 24 to 48 hours.

In order to make loss of income insurance claims and receive a settlement, you must:

  1. Demonstrate the financial loss by indicating how much the company would have earned had the damage or business interruption not occurred.
  2. Show your company’s tax returns from previous years.
  3. Submit copies of profit and loss statements that support your loss of income claims.
  4. Illustrate sales projections.

There are several policies that allow business owners to opt-in. Utility interruption is one of those opt-in policies. Although this does not include power surge coverage, you will be able to get a settlement if the utility interruption was a result of a physical damage for which you have coverage. For instance, if your AC unit leaks onto your computers and your system fails, making sales impossible, you will be covered. If a pipe bursts and destroys a pizza oven and you are unable to continue running your pizzeria until it is fixed or replaced, you may be covered for loss of income insurance claims. Typically, you will not receive coverage for fixing or replacing the AC unit or the pipe itself.

If you had to close the doors of your business during, before, or after Hurricane Irma, we can help you file loss of income insurance claims. We’ll get you the largest possible settlement. Fill out the form below for a free business inspection.

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Loss of Income Insurance Claims | Claim Denial

While businesses attempt to recoup their losses after Hurricane Irma, some business owners are outraged over claim denials. One Texas business owner summed up this issue in a Reuters interview following hurricane Harvey:

“I think the whole thing is a rip-off,” said Thomas Arnold, an optometrist in Sugar Land, Texas. He said his business, Today’s Vision, was shuttered for almost five days after Hurricane Harvey struck because nearby flooding kept employees and patients from getting there.  Arnold says he pays $1,083 per month for coverage. But after he filed a claim, he said his insurer rejected it because his business was not physically damaged.

Without direct physical damage, your loss of income insurance claims will most often be denied. Even during power outages as a result of natural disasters, your business will not be covered for loss of income insurance claims unless physical damage occurred to your property. This physical damage must be covered under your policy. Claim denials can even occur if the business was in a ‘slow season’ at the time of the loss of income claim. Your claims can also be denied if the insurance company feels that you will be able to make up your losses in a future quarter.

Loss of Income Insurance Claims | Get The Largest Possible Settlement!

Bulldog Adjusters will be able to get you the largest possible settlement. We’ve won millions of dollars for business owners in Florida, and we’re eager to help you get the settlement you need to keep your business running and growing. Give us a call at (954) 507-4210.

See below articles that will make you the business owner in-the-know when it comes to coverage:

Roof Damage Checklist

Does Home Insurance Cover Roof Damage?

Does Homeowners Insurance Cover AC Replacement?

5 Ways to Fix a Roof Leak

Your Insurance Questions Finally Answered

Home Insurance Deductible Higher Than Repair Costs? 

Florida Landlord-Tenant Law: Your Official Guide

How to Fix a Garbage Disposal 

Do you have questions about loss of income insurance claims? Send your comments or questions directly to me at Vince@bulldogadjusters.com.




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