What Documents Do I Need for a Business Interruption Claim?
Even if your insurance carrier told you that it would not cover your pandemic-related business interruption (BI) claim, it is critical that you file anyway. The documents required to file a BI claim will provide essential information about your losses and expenses.
While insurance companies are currently refusing to honor most coronavirus-related BI insurance claims, that could change. New York and other states are considering legislation that would broaden such coverage retroactively. For example, most policies exclude business interruption due to viruses or bacteria. If such legislation is passed– and insurance companies are fighting hard against these bills– COVID-19r related business interruption may prove covered.
A New York City business interruption insurance lawyer at Douglas and London understands the trauma this unprecedented situation has caused for many business owners, and we will protect your rights while pursuing the compensation you deserve.
Business Interruption Insurance
Business interruption insurance is generally concerned with property damage. It is triggered when the physical structure of the building is damaged. Fires, hurricanes, and flooding are the most common reasons for filing BI claims, at least until the coronavirus arrived in New York.
This insurance is designed to replace lost income when the physical structure is unusable. The coronavirus does not harm physical structures, which is one reason insurers are denying claims.
However, these policies often include other reasons besides property damage for triggering a claim. These could include a civil authority shutting the business down, which is what occurred during the lockdown.
When collecting the necessary documentation, make sure to include only those losses relating to the pandemic. In addition to this paperwork, you must document the date the business had to close due to government mandates, whether local or statewide. Include any dates in which the pandemic severely affected your business if you were allowed to reopen.
Gather the following financial documents to support your BI claim:
- State and federal tax returns
- General ledger
- Monthly profit and loss statements
- Current annual financial statements and those for the past several years
- Inventory list
- Purchase orders
- Supplier contracts
- Payroll records
- Bank statements
- Loan payments
If your business had a budget or projections prepared before the shutdown, submit that information as well. This can demonstrate how well the company was expected to perform before the pandemic arrived.
Separate Covid-19 Expenses
Document any expenses specifically relating to COVID-19. This may include the purchase of personal protective equipment (PPE) for employees, the costs of disinfectants and other cleaning supplies, and any equipment purchased to assist in allowing employees to work from home.
Keep detailed records of the number of employees you have, their monthly hours, and how those numbers changed before and after the pandemic. You must include those employees whose hours were reduced, and those you had to lay off.
If you had workers who could not perform their jobs due to testing positive for the coronavirus, include that information. If any employees took leave under the provisions of the Families First Coronavirus Response Act, note why such leave was taken.
Paycheck Protection Program
If your business received funds from the Paycheck Protection Program (PPP) to cover employee wages, make sure to keep accurate records. You will need to list when they were received and the amount. You must also show how the monies were used. When the notice of forgiveness is received, keep track of the date.
Contact us at Douglas and London for a free consultation
If the pandemic has severely interrupted your business, you need our team at Douglas and London. Schedule a free, confidential consultation by completing our online form or calling or texting us 24/7. Bring your insurance policy to the meeting, where a lawyer will review it and explain your options. Our dedicated attorneys have recovered more than $4 billion in settlements and verdicts for clients. There is never a fee unless you receive compensation, as we work on a contingency basis. Hablamos Español.