What is Business Interruption Insurance?

What is Business Interruption Insurance? Business interruption insurance is a type of insurance that reimburses the policyholder for lost income and helps pay for expenses when a business is affected by a particular “peril.” Business interruption insurance is also sometimes referred to as “business income coverage” or “contingent business interruption insurance.” Business interruption insurance is typically part of a business owners insurance policy. In the aftermath of a covered “peril” (e.g. theft, fire, wind, lightning, falling objects, etc.), business interruption insurance can help reimburse covered businesses in two ways:

1. Reimbursement for lost income — For example, if a fire (the “peril”) destroys your inventory, business interruption insurance can reimburse you for the lost income sustained as a result.
2. Reimbursement for extra expenses — For example, if your business was forced to temporarily relocate due to a fire, business interruption insurance can cover the extra expense associated with your temporary lease.

Perils Covered by Business Interruption Insurance 

While business interruption coverage varies, many policies include coverage for lost income and extra expenses incurred by a business due to the following “perils”:

• Wind
• Hail
• Fire
• Mechanical breakdown
• Vandalism
• Theft

“What about business interruption insurance for COVID-19?” The COVID-19 pandemic has devastated many North Carolina businesses. Many business owners are seeking to file coronavirus business interruption claims. Business interruption insurance may or may not cover perils such as the coronavirus outbreak. In certain cases, such as business interruptions caused by government-mandated shutdowns during the COVID-19 pandemic, you may be entitled to compensation under a policy’s “interruption by civil or military authority” / “civil authority ingress or egress” provisions. All policies are different, however, and if you are considering a claim for coronavirus-related business loss of income or extra expenses, it is best to speak with a coronavirus business interruption lawyer to review your case. Business interruption compensation may be available for many types of businesses that have suffered loss of revenue or unanticipated expenses due to COVID-19, including bars, restaurants, and gyms and fitness centers, among others.

Policy Limits

Like other insurance policies, business interruption insurance has a policy limit, which represents the maximum amount the insurance carrier will pay toward your losses. Financial losses that extend beyond your policy limit are not covered.

Restoration Periods

Most business interruption insurance policies contain a “restoration period,” which defines the amount of time for which your policy will cover lost income or extra expenses. In most cases, business interruption policies have a 48 to 72-hour “waiting period” before benefits kick in, and policy coverage usually extends 12 months from that date (although that duration may be different, depending on your specific policy).

Business Owner Obligations

If you have a business interruption insurance policy and decide to file a claim, the insurance company typically will expect that you take certain steps and precautions to limit further damages. For example, if your office building was damaged in a severe storm, the insurance company will want you to have taken certain steps to secure the building — such as boarding up broken windows — to prevent future damage. In many cases, your business interruption insurance company will reimburse you right away for some or all of the immediately necessary repairs.

Have you been denied by your business interruption insurance company due to COVID-19?

If your North Carolina business has suffered a loss of revenue and unanticipated expenses as a result of the coronavirus pandemic, some or all of your COVID-19-related financial losses may be covered under a business interruption insurance policy. Many insurance companies are denying these claims. However, if your business interruption claim has been denied, you do NOT have to simply accept “no” for an answer. Our North Carolina coronavirus business interruption lawyers can help evaluate your claim for COVID-19-related losses and determine your best legal options. For a FREE, no-obligation consultation with a North Carolina business interruption claim attorney, please call 1-800-525-7111 or complete the short form below.  The consultation is free, there is no obligation, and you won’t pay any upfront costs or attorney fees unless we win your case and you receive compensation for your claim. Please call 1-800-525-7111 today and let’s review your COVID-19 business interruption claim. Riddle & Brantley has been representing North Carolinians who have been denied by their insurance companies for decades and we would love to help however we can. Call 1-800-525-7111 today to speak with a North Carolina business interruption lawyer today. Justice Counts for those whose businesses have been affected by COVID-19. We would love to help if we can.