The Boulder Lawyers at LaszloLaw Discuss Business Interruption Insurance
In light of the recent flood in Boulder and the surrounding communities, the Boulder lawyers of LaszloLaw have written a few posts (here and here) that may assist those individuals and businesses who have been impacted.
In addition to those previous posts, another item to consider is whether your insurance has Business Interruption (BI) Insurance. If you have purchased BI insurance for your business, it is very important to read the policy to understand the scope of your coverage and when that coverage becomes operable—for example, coverage under some policies may not be available for the first 2-3 days of the interruption.
Business Interruption insurance is intended to compensate a business for income it would have earned had a covered loss event not taken place. While BI coverage is provided under most package policies for businesses (or as an endorsement to a property insurance policy) it is important you carefully review your policy to determine if you have such coverage.
The types of loss commonly covered by BI insurance include:
Business Income: replaces business income that would otherwise have been earned by the business had no loss taken place. Operating expenses, such as utilities as well as employee salaries, may be covered;
Extra Expense: pays for reasonable and necessary expenses incurred during the period of restoration that allow the business to continue to operate during the repair period;
Contingent Business Interruption: designed to cover loss of income due to property loss at a key supplier or customer location; and
Civil Authority: This provides coverage for loss of business income and extra expense sustained as a result of governmental denial of access to the insured’s property such as government-issued street closures.
In addition to Business Interruption insurance, your policy may include “Extended business interruption” and/or “Contingent business interruption” as extensions of your business interruption coverage.
Again, it is of utmost importance that you carefully review your policy to determine what coverage you have and what your responsibilities are under that coverage. Equally important is that you put your carrier on notice as soon as possible.