Business interruption insurance is suddenly getting a lot of attention. If you’re like most business owners, you haven’t thought much about this kind of insurance before the COVID-19 pandemic. However, with the Coronavirus crisis shuttering businesses on a massive scale, business interruption insurance is suddenly taking center stage. Owners need to know if they can find relief for their income losses by filing a claim. They also need guidance about what to do if their business interruption claim gets denied.
If you’re a business owner, you might be interested in learning more about business interruption insurance. Below, our experienced business interruption claims attorneys have put together 10 terms to help you understand business interruption insurance and how you might benefit from filing a claim.
1. Actual Loss Sustained
When it comes to business income, your actual loss sustained is your income. Actual loss is defined as what you would have earned if the business interruption did not happen. It’s calculated by taking what you would have made if the loss hadn’t occurred and subtracting what you actually earned during that time.
In other words, your actual loss sustained is the net amount that you’re out because of the COVID-19 or Coronavirus crisis. You don’t necessarily receive the maximum amount of your policy limit. Instead, you receive your actual loss sustained, which is your net real losses because of the pandemic.
2. Business Income
Business income is the money that you make operating your business. A business operation can receive income by selling goods or by providing services. Even rental income can be a part of business income.
Demonstrating your income leading up to the COVID-19 Coronavirus shutdown is an integral part of winning your business interruption claim. Accurate tax returns are essential, as are your accounting records. Your business interruption claim attorney makes sure that you provide the right documentation to get the most compensation that you stand to receive under the terms of your policy.
3. Bad Faith Practices
Bad faith occurs when an insurance company doesn’t justly honor its policy. When you have a valid claim, the insurance company has a legal duty to pay your compensation. They have to make the payment within a reasonable amount of time. When the insurance company doesn’t fairly pay your claim, they act in bad faith. In addition to making a legal claim of non-payment of your insurance policy, your business interruption lawsuit can also include a claim for bad faith insurance practices.
4. Mitigation of Damages
Mitigation of damages is the duty of the insured party to take steps to reduce their damages. Even in the wake of Coronavirus, you have to do what it takes to make your losses as little as possible. When you file your claim, the other side may critically examine your efforts to mitigate damages.
If your business interruption claim is denied, your business interruption claim attorney can look at the information you provided and determine if there is a better way to address issues related to mitigation of damages that may be present in the case.
5. Contingent Business Interruption Insurance
Sometimes, you lose business because of a supplier or distributor. If their operations are interrupted, your business may suffer as a result. Contingent business interruption insurance protects an owner when they have a problem with a supplier or distributor. Contingent business interruption insurance is the part of an insurance policy that helps you when your losses are because of a third-party that is an integral part of your business.
A rider is a particular part of an insurance policy that is attached to the main contract. It adds additional terms to the policy. If you have a rider in your insurance policy, it has the full force of the law. It is enforceable as a contract, just like any other part of the insurance contract.
It’s important to look for riders that may impact your business interruption policy. Usually, when you purchase the policy, you have the opportunity to discuss the individual needs of the company and choose add-ons you deem are appropriate.
The policy is your contract of coverage. It is a legal agreement between you and the insurance company. The coverage that you have depends on the terms that are written into your policy. Your business insurance policy is an enforceable contract that provides the details of your coverage.
However, not all policies are created the same. In order to determine if your business interruption claim is wrongfully denied, it’s critical to look at the specific details of the policy. Your business interruption claims attorney works to enforce the terms of your insurance policy, especially if you’ve been denied your rightful compensation.
8. Legal Precedent
Legal precedent is any way that the courts have dealt with a similar situation before. Even though laws are most important, there’s no way for a law to cover every possible circumstance. It’s up to the courts to interpret the law. Legal precedent is a way that the courts have interpreted the laws in a similar situation before.
It can be helpful to cite legal precedent when you make the arguments to the court. A business interruption claim lawyer knows how to research legal precedent and effectively use it to your advantage in a legal strategy.
9. Plaintiff and Defendant
A plaintiff is a person who brings a lawsuit. A defendant is the party who responds to the lawsuit. In business interruption claims, you, as the business owner, are the plaintiff. You bring your claim against the defendant, who is the insurance company. If your business interruption claim is denied, you are the plaintiff if you decide to bring a legal claim against the insurance company.
10. Period of Restoration
The period of restoration is considered the time between the damage to the business and when the business is fully restored. In other words, it’s the period that your business is shut down or limited. For the purposes of a business interruption claim, the period of restoration is the time that it takes you to get your company up and running again. Depending on the terms of your policy, you may be able to claim compensation for the entire period of restoration.
COVID-19 Business Interruption Claim Attorneys
Our business interruption claims attorneys are handling emergency Coronavirus (COVID-19) cases. If you’ve been denied compensation from your insurance company for your business interruption claim due to COVID-19, the experienced legal team at Adam S. Kutner, Injury Attorneys can help.
Call us today for your free consultation.