BUSINESS INTERRUPTION
• Providing the insurance company
with a notice of a direct physical
loss. This notice should include a
description of the property involved.
Businesses should also notify
their insurance broker as soon as
reasonably possible. After giving
notice of a loss, insurance companies
will typically require businesses
to provide a description of the loss,
including how, when and where it
occurred.
• Taking all reasonable steps to protect
the covered property from further
damage. Businesses should document
all expenses they incur in their efforts
to protect covered property from
further damage.
• Permitting the insurance company
to inspect the damaged property
and any relevant records to prove the
loss. Additionally, businesses will
typically be asked to provide a signed
and sworn proof of loss containing
information requested by the
insurance company.
• Cooperating with the insurance
company during the investigation
of the loss and the settlement of the
claim.
• Resuming operations as soon as
possible to limit losses.
PREPARING FOR AND RESPONDING TO
A CLAIM
Business interruption claims can occur
without warning, and it’s important to
be prepared should a loss occur. To help
ensure claims are resolved quickly and
favorably, consider the following best
practices:
• Gather information and be prepared
to provide proof of your business
income and expenses for a period of at
least one to two years before the loss
occurred. Specifically, key information
to have on hand when submitting a
claim includes the following:
• Financial statements for the last
two calendar years before the loss
occurred
• Payroll records
• Your hours of operation
• Variable costs that have the
potential to be reduced or
stopped during the business
interruption
• Daily or monthly revenue and
sales records for the last two
accounting years
• Your pre-loss income
• Details regarding relevant
contracts, including property and
equipment leases, and customer
and vendor agreements
• Records regarding any continuing
expenses your business is
responsible for during the
disruption
• Sales and production summaries
• Financial projections made prior
to the loss
• Inventory records
• Expense records
• Read your policy carefully, and ensure
you understand how insurers will
calculate lost income.
• Gather data following the loss. Avoid
throwing any affected property
away, and take photos and videos of
damages.
• Maintain records of sales and
operating expenses following a loss.
Be sure to track lost revenue and
additional expenses incurred as a
result of the disruption.
• Act to minimize losses. This could
include moving to a temporary
location or outsourcing portions of
your business.
• Retain copies of all communications
with your insurance company
throughout the claims process.
Some businesses communicate
with insurance companies through
independent insurance adjusters
or attorneys. These professionals
can also provide guidance on how
to maximize your recovery efforts
following a loss.
ADDITIONAL PROTECTION
Business interruption insurance is
designed to give businesses access to the
protection they need when they need
it most. However, these policies can be
complex, and it’s important to work with
your insurance broker closely when seeking
coverage or filing a claim. To learn more,
contact JGS Insurance today. +
BY: GWENYTH P. LUU, CLCS
DIRECTOR - COMMERCIAL LINES
JGS INSURANCE
Gwenyth Luu helps organizations
improve their bottom line and lower their
total cost of risk by implementing the
JGS Proactive Service Platform. The JGS
Proactive Service Platform is an inclusive
strategy that focuses on primary cost
drivers of a risk management program.
Gwenyth helps businesses understand
all of their potential and actual costs
and liabilities, execute an actionable
strategy, and deliver superior client
service and support. The JGS Proactive
Service Platform is driven by continuous
strategy and service delivered on a daily
basis throughout the year. The service
platform includes risk control strategies,
claims advocacy and management,
contract reviews and insurance program
design reviews.
29