What do professionals need to know about a business interruption insurance claim?

How can I protect my practice from a business interruption?

It is important to take the right steps to ensure your practice receives appropriate compensation from a business interruption event. These best practices can help protect your practice and ensure you are adequately compensated for your losses in the event of a business interruption:

Proper documentation

You need to provide proof of income to receive appropriate compensation for a business interruption — and meticulous documentation can help support your claim to your insurance company. Ensure that you maintain accurate and up-to-date financial records to help quantify your loss of income to your insurance provider.

Gather evidence

Proper documentation is the first step toward receiving appropriate compensation for a business interruption event. However, you may also provide anecdotal evidence such as calls from clients who could not access your services due to a disruption.

Additionally, many insurance providers may assume that you can reschedule services that were impacted by a business interruption event — and that your income is deferred instead of lost. However, clients may choose to move to a different service provider during the interruption, and providing evidence of clients you lost during a service disruption may help support your claim.

Proactively assess your insurance policies

Professionals renew their insurance coverage annually — and it is essential to proactively review your policies and coverage to ensure they meet your specific needs. During the renewal process, assess your policy wordings and coverage limits to determine if they will fully protect your practice in the event of a business interruption.

An advisor can help review your policies to identify any gaps and ensure you have the right coverage amounts in place to protect your practice before a business interruption event occurs.

Consider extra expense coverage

While extra expense coverage is distinct from business interruption coverage, it can still help protect your practice during an unexpected event. You may be able to keep your practice running throughout a disruption by setting up remote workstations or renting a temporary office space — and extra expense coverage can help you recover those costs.

Review the limits and inclusions of the extra expense coverage your practice has in place. If you your policy does not include extra expense coverage, consider adding it to your insurance policies to help ensure your practice keeps running during an interruption.

Seek outside support

The insurance claim process can be stressful and difficult to navigate — and a third-party advisor can help quantify your losses accurately to your insurance company. An advisor can provide guidance throughout the complex claim process and gather evidence to prove your loss of income. They can also communicate with your insurance company to ensure that you receive adequate compensation for your losses and give you more time to focus on getting your practice up and running.

Take the next steps

Each practice is unique — and professionals face specific challenges during a business interruption claim. However, maintaining comprehensive documentation, ensuring that you proactively assess your insurance policies, and seeking the support of an advisor can help quantify your losses accurately and ensure you receive adequate compensation.

For more information, contact a member of MNP’s Insurance Advisory team. Our advisors can work with you to ensure you have the appropriate level of coverage to protect your business. We can also provide professional support after your business experiences an interruption event to help quantify your losses and ensure you receive fair compensation.