The Northeast recently suffered a storm that came in the late winter season which entails an interruption to many businesses because of the revenue loss that they did not expect. Business owners that are affected because of the storm will most likely be feeling anxious because their company might be suffering the same fate.
The exact effect of such occurrences cannot be calculated exactly in dollar figure but many businesses are struggling with the financial loss because they have to close, the productivity is decreased and unexpected expenses occurred.
Businesses have many options when it comes to protection to prevent losses because of natural occurring disasters such as storms. They should ensure to have a strong communication strategy in times of crisis, they should implement disaster procedures all throughout the company and the business should have interruption insurance. The business interruption insurance caters to businesses by providing coverage in cases where they lost earnings and the business has suffered negatively from unexpected events such as fires, mechanical breakdowns as well as storms.
For business interruption, there are three main kinds of claims:
- The first referred to losses of the company due to physical damage to their properties that are under coverage. This includes almost any kind of dangerous situations like blizzard, hurricane and a car plowing through the property.
- The second claim is for extended period of indemnity. This covers the losses that occur during the reopening of a business that has not yet been operating normally. This coverage has a time limitation which varies between 30 to 90 days but it can be extended or more than a year.
- The third type of business interruption coverage is contingent which covers the business if there are damages to the property of other entities like key suppliers.
After filing a claim, the business is required to hire an accountant who will be the one to review the claim as well as offer opinion regarding the cost of the business interruption to the company. It is recommended that the accountant should have accountant insurance to make sure that the company is fully covered as well.