BUSINESS INTERRUPTION LAWYERS HOUSTON
INSURANCE & CONTRACT CLAIMS
Business Interruptions Claims and Lawsuits
At Reich & Binstock, we understand the importance of protecting your business and your business income. However, no matter what kind of measures you take to protect your business, disasters can strike at any moment. An unexpected disaster, temporary business closures, and other unexpected losses can greatly hinder the operation of your business. When this happens, you’ll likely file a claim under your business interruptions insurance. But what happens if your insurance company wrongfully denies your claim? In this case, you need qualified business interruption lawyers on your side.
That’s where the business interruption lawyers at Reich & Binstock come into play. Our Houston insurance lawyers have extensive experience fighting back against wrongfully denied insurance claims. If your business and your livelihood are suffering, we’re here to fight for your right to just compensation. For qualified legal help with your business interruption claim, contact Reich & Binstock today. Call our Houston law firm at 713-622-7271 today to schedule your free case evaluation with us.
What Is Business Interruption Insurance?
Business interruption insurance helps to shield a business owner from certain covered losses, as well as replace lost income and other extra expenses related to a covered event. Another name for business interruption coverage is business income coverage. In most cases, it is simply a part of your business owners insurance policy. Especially in areas that are prone to natural disasters or extreme weather conditions, business interruption insurance coverage is highly valuable. Keep in mind that this type of coverage is different from a regular business owners policy or a commercial insurance policy.
Types of Business Interruption Insurance
In general, there are four types of business interruption insurance claims. The first is described in the previous section. The other three types are as follows.
- Contingent business interruption coverage: This form of coverage applies to losses experienced due to supply chain disruptions. Coverage typically includes costs for rent, payroll, and other related expenses.
- Extended business interruption coverage: This covers the period during which a business is undergoing repairs but has not yet returned to its pre-loss income levels.
- Civil authority coverage: This form of coverage is generally triggered when your business suffers some kind of direct physical loss. The loss must have occurred as a result of a decision or action by a civil authority, such as a local, state, or federal government entity.
What Coverage Does Business Interruption Insurance Offer?
The main purpose of having a business interruption insurance policy is to avoid or protect against lost income due to a covered peril. We’ll go over what qualifies as a covered loss later. However, not all business interruption insurance policies cover the same losses. For this reason, it’s important to read over your policy language very carefully. This helps to ensure that you know exactly what business losses are covered but your insurance carrier.
The average business interruption policy will include coverage for the following losses.
- Lost income: This usually includes reimbursement for broken items and merchandise but without the cost of other expenses like shipping. Reimbursement is generally determined by the income you made before your losses.
- Other business and operating expenses: Maybe a terrible fire or a natural disaster forced you to move your business to a temporary location. In this case, your business interruption insurance will cover relocation costs, such as your new rent.
Bear in mind that your business interruption coverage generally does not include property damage. Instead, many business insurance policies include property damage coverage. This portion of your business insurance policy will cover losses such as property damage to your building, new machinery costs, and other physical losses.
What Is the Restoration Period in Business Interruption Insurance Claims?
Most business interruption coverage has what is known as a restoration period. This is basically the amount of time that your insurance company will pay for the expenses listed in your business interruption claim. Be sure to read over your specific insurance policy to ensure that you know when your restoration period begins and ends.
Most policies have a 48-hour to 72-hour waiting period before your period of restoration begins. Additionally, most policies have a restoration period of no longer than 12 months. It is not possible for business owners to extend this period of time. It’s important to start and finish the repairs to your business within this period of time. Otherwise, you risk having your policy expire before you can fully restore your business operations.
What Is the Business Interruption Claims Process?
Before filing a business interruption insurance claim, you must adequately prepare for the claims process. In order to have a successful business interruption claim, it’s important to have well-documented evidence to support your claim. To ensure that businesses avoid risking a review or denial of their claim, we recommend taking the following preparation steps.
- Examine your policy and identify your coverage limit before filing a claim.
- Report your claim as soon as possible.
- Examine and document all signs of physical loss.
- Form a team to handle your legal claim.
- Regularly communicate with your insurance company.
- Mitigate your damages wherever possible.
- Maximize your recovery by helping the insurer understand your business.
- With the help of an experienced law firm, present your final case to the insurer.
- Take your time with the claims process.
- Don’t settle for low compensation.
The best way to achieve a fair settlement is to work with a law firm that has extensive experience with insurance law and the claims process. Reich & Binstock can help you understand your insurance coverage, promptly file a business interruption claim, and go over your legal options during your free consultation. Don’t hesitate to reach out to us if you find yourself and your business in a bind.
What Causes Business Interruptions?
When disaster strikes, there’s not usually a lot you can do to protect your business from property damage or temporary closure. But what exactly counts as a disaster in terms of business interruption claims? Below, we outline some of the disasters that business owners recover losses for under their insurance coverage.
- Fire damage and explosions
- Damage from natural disasters (excluding earthquake damage and flooding)
- Cybersecurity breaches
- Interruptions due to communicable diseases or shelter in place orders
- Changes in regulations or laws
- Supply chain issues
- Water damage
- Broken machinery
- Vandalism and other crimes
- Loss of power and electricity
How Much Business Interruption Insurance Do I Need?
Although many people’s business owner policies include business interruption coverage, some people still need to purchase a separate policy for this coverage. If so, you may wonder how much coverage you actually need for your business. It’s important for aspiring policy holders to closely examine the plans that insurance companies offer. This is where your business interruption claim team will come into play.
You’ll likely need the help of accountants and other financial professionals with your business to determine which level of coverage is right for you. Generally, most business owners consider their gross profits and projections of future profits to decide on their policy. If any of your losses exceed your policy limits, you’ll have to pay out of pocket. Make sure that your policy will cover the following.
- Payroll for employees
- Loan payments
- Your lost net income
- Lease, rent, and mortgage payments
How Can Insurance Companies Mismanage Business Interruption Claims?
Many businesses rely on having their business interruption insurance cover their losses after a disaster. However, insurance companies exist to make a profit. They operate with their own best interests in mind, not yours. For this reason, insurance companies often engage in what is called insurance bad faith. Fortunately, if an insurance company wrongfully denies your claim, you may have the basis for an insurance bad faith lawsuit. Some of the common bad faith tactics that insurers use include the following.
- Undervaluing your claim
- Wrongfully denying your business interruption claim
- Failing or refusing to look into your claim
- Lying to you or misleading you about your coverage
- Not explaining the reasoning behind their denial of your claim
- Wrongfully and unnecessarily extending the claims process
The last thing that businesses and business owners need after a disaster is to deal with a shady insurance company. Contact the law firm of Reich & Binstock for a free evaluation of your case.
Can I File a Business Interruption Lawsuit?
After a denial of your claim, you can file a business interruption lawsuit against your insurer. Your business has already suffered enough losses due to disaster, and you can’t afford a denial of your claim. With the help of an experienced business interruption attorney, you can file a business interruption lawsuit against your insurer. The attorneys at Reich & Binstock are here to evaluate your claim and outline all the legal options available to you.
How Do You Prove Business Interruption?
Because these claims tend to be highly complex, it’s important to assemble a team to gather evidence to support your claim. To have a successful claim, you must have ample documentation of your covered property that suffered losses. Additionally, the damage to your business must have resulted from a covered peril. You must also prove that this covered event directly caused your loss of income and business interruption. In order to prove this, we recommend gathering certain evidence, such as the following.
- Tax returns
- Financial statements and business ledgers
- Communications with vendors
- Orders from customers
- Other relevant financial information
Do I Need a Lawyer for a Business Interruption Insurance Claim?
Although it isn’t required to work with law offices for your claim, it is certainly recommended. After all, insurance companies don’t exactly make their policies easy to read. Working with an experienced business interruption lawyer can help protect you in the event of an unfair denial. We can also help you when you submit your initial claim. Our attorneys will ensure that you fully understand what you are legally entitled to under your policy.
How Much Will a Business Interruption Denial Lawsuit Cost?
This is an understandably common question. Your business is already suffering from a disaster, so you don’t want to spend the rest of your money on a complicated, lengthy lawsuit. However, our attorneys offer a free case evaluation and operate on a contingency fee basis. That means you won’t pay us a cent unless we secure a recovery for you. You won’t pay any upfront costs in order to file your claim.
Do You Need a Business Interruption Attorney?
If your business has suffered covered losses, Reich & Binstock can help you file your claim. We can also help you fight back against bad faith insurance tactics should your claim be wrongfully denied. We will make sure that you fully understand your options and keep you up to date on every step of your claim process. To schedule a free consultation and establish an attorney-client relationship with us, please call our office at 713-622-7271 today. You can also fill out our online intake form to schedule an appointment.