Business Interruption Claims Mistakes

Business Interruption Claims Mistakes owners are not aware that their business may suffer interruption losses as a result of property damage and/or other disasters. Others think that they are covered by their insurance and fail to crunch the numbers to determine how much coverage they really have. Still others under estimate the value of their business and don’t have enough coverage. Having the right advisor to help navigate the intricacies of the concept and obtain adequate coverage can make all the difference.

Insurers and their adjusters must know how to evaluate business interruption claims based on the application of a broad range of accounting concepts, analyses and insurance policy valuation clauses. A thorough familiarity with these principles is essential for a successful claim adjustment.

Why Hiring an Attorney is Crucial for Your Legal Success

One of the most common mistakes in evaluating business interruption claims is ignoring the impact on a company’s future results. This is often a result of failing to understand the underlying assumptions that are used in the evaluation process. As a result, the evaluation is underestimating the potential profit loss resulting from the disruption.

Another mistake is assuming that the insurance company is correct when they calculate lost income and other expenses. The calculation of these amounts is based on a combination of historical financial records and sales projections, and should not be treated as an exact science. In addition, the policyholder should be prepared to enlist the assistance of professionals such as forensic accountants and legal advisors who can provide a more complete analysis of their losses.