How Do I File a COVID-19 Business Interruption Claim?

Virtually every business in the U.S. has been damaged by the COVID-19 crisis and mandated government shutdowns. From retail establishments to restaurants and hotels, owners are turning to their insurance for business interruption (BI) coverage, which is designed to indemnify against lost profits, operational expenses, and other costs while the property is inaccessible.

Payouts for business interruption are largely informed by specific policy language. If you haven’t already carefully reviewed your BI insurance, it’s essential to do that immediately. All policies will require a notice of claim within a specified period, so time is of the essence.

The following is a cursory checklist of steps that a policyholder should take when filing a BI insurance claim for COVID 19 losses.  As with any claim, this process may be labor-intensive, requiring hours of preparation.

Steps for filing a Business Interruption claim

  • Notify your carrier that you will be filing a claim for Business Interruption coverage right away
  • Maintain records of all communication regarding your claim with the insurance company
  • If appropriate, engage an independent adjuster
  • Document the circumstances and facts of the damage sustained
  • Identify and keep records of all pandemic-related losses, such as:
    • production expenses for using alternative facilities or methods
    • extra cost for materials and labor on subcontracted work
    • receipts for supplies needed for repairs
    • receipts for rent payments if forced to move your business
    • advertising costs for notifying clients of closure or temporary new location
    • extra freight expenses or shipping charges for inventory or emergency supplies
    • overtime salary or wages
    • expenses incurred for cleaning the premises and PPE
    • cost of utilities
    • added security expenses during business closures

In addition to the above:

  • Keep track of all business orders that were canceled because of the coronavirus, including order inquiries not yet written into the contract
  • Production records pre-COVID, the period during the loss, and after
  • Employee payroll records pre-COVID, the period during the loss, and after
  • Sales records pre-COVID, the period during the loss, and after
  • Inventory records pre-COVID, the period during the loss, and after
  • Financial statements
  • Tax returns
  • Bank statements
  • Any records that demonstrate supply chain disruption that has affected your business
  • Monthly rent or lease statements

Projected revenue is another critical component of a Business Interruption claim. Accountants may be helpful in creating a paper trail that establishes revenue projections pre-COVID 19.

Contact our New York Business interruption insurance lawyers

Take action now, before it is too late– call Douglas & London to speak with a New York City business interruption insurance lawyer. We can help you navigate these unchartered waters. We successfully advocated for consumers who were injured during Hurricane Sandy, and are prepared to fight for you.

Our legal team understands that policy language can be ambiguous, and we are committed to helping clients recoup business losses stemming from government-ordered shutdowns. If you have questions about whether COVID losses are covered under your BI clause, we invite you to schedule a free consultation.