Business Interruption Insurance

The 2017 hurricane season was the most expensive in U.S. history, causing over $200 billion in damages. This was especially true of Harvey in Texas.

As a business owner in the Rio Grande Valley, your business is much more susceptible to flooding, hurricane damages, and other weather-related damages. While commercial property insurance will help to cover physical damages to your business, Business Interruption Insurance (also known as Business Income Insurance) helps to cover expenses and lost income that come as a result of the disaster.

With the 2018 hurricane season underway, now is the time to consider purchasing Business Interruption Insurance. If you are unfamiliar with how it can protect your business after a major catastrophe, your bad faith insurance claim lawyers at Millin & Millin would like to inform you about how it can be the protection you need to save your business.

Please consider the following information.

The Basics About Business Interruption Insurance

Business interruption insurance is an additional rider that you can purchase from your commercial property insurance provider or other specialized agency. There are various types of this insurance which cover a variety of different situations and damages including:

• Traditional business interruption: This type covers potential income lost during the time it takes to repair the property to working order.
• Extended business interruption: This type covers income lost after the property has been repaired but before income levels return to their previous levels. This coverage is only for a limited amount of time as specified by your contract.
• Contingent business interruption: Covers your business’ loss of income that comes as result of damage to the property of providers, suppliers, or consumers of your business’ product or service.

Extended and contingent coverages can be purchased as additional riders of regular business interruption insurance.

What does business interruption insurance cover?

What your policy covers is dependent on the business assets that you want to protect. Every policy will be unique to a business owner’s specific needs. As always, it is important that you read through the policy and have a solid understanding of the coverage.

Generally, business interruption insurance can cover and protect:

• Profits that would have been earned during a certain time frame (dependent on an analysis of prior months’ financial statements and other factors).
• Operating expenses and other fixed costs.
• Expenses that are required to keep providing services and not lose customers.
• Depending on your coverage, you may receive compensation for moving to a temporary location.
• Coverage can also provide compensation during the time needed to get back to your former customer base.

Coverage is triggered when an incident - as specified by the contract - causes damage to your business and extends for however long as determined by the policy. Please be aware that business interruption insurance is limited and any losses that exceed those limits are the responsibility of the business owner(s).

How much coverage does my business need?

There are a number of factors that play into the amount of coverage your business needs. Consider the following when determining what level of coverage you may need:

• The probability of your business having to deal with a disaster.
• The types of disaster or weather-related damage that could occur in the region where your business is in (i.e. hurricane in coastal areas).
• The amount of time it would take your business to return to normal.
• The assets that you want to cover.
• Additional insurance provisions that can protect your business.

In an area like the Rio Grande Valley, which can experience a major disaster like a hurricane, it is important to have coverage that will protect your business for more than a few days.

However, even with the right commercial property insurances in place, your insurer may attempt to underpay or outright deny a valid claim. When this happens, don’t allow bad faith insurance tactics to derail you or your business. Depend on the responsiveness of the bad faith insurance legal team of Millin & Millin to get you the justice you deserve when seeking your rightful compensation after a natural disaster like a hurricane.

Contact us today at (956) 631-5600 to get the legal representation you need. Millin & Millin serves the greater McAllen metro area and the whole Rio Grande Valley.