Business Interruption Claims After a Hurricane
When a hurricane closes your business, the lost income can cost more than the physical damage. Business interruption coverage is meant to replace it, but these claims are complex and often underpaid.
What the coverage can include
- Business income: the net income you would have earned, plus continuing expenses such as payroll and rent
- Extra expense: the added cost of staying open, such as a temporary location or rented equipment
- Civil authority: lost income when a civil authority order blocks access because of covered damage nearby, if your policy includes it and within its time limits
- Dependent property: losses when a key supplier or customer is shut down (if your policy includes it)
The “period of restoration”
Most policies pay only for the time it should reasonably take to repair or replace your property, not necessarily the time it actually took. Insurers often argue for a shorter period. Delays the insurer causes should not shorten your recovery.
Records you’ll need
- Profit-and-loss statements and tax returns for the past two to three years
- Monthly sales records, to show seasonal patterns
- Payroll records
- Receipts for every extra expense
- Dates of closure, reopening and any evacuation orders
A forensic accountant is often worth hiring for larger claims.
Keep a complete copy of your policy
After Katrina, I represented an airport rental-car company whose fleet was flooded, burned or never returned. A federal court let most of its claims go forward, but dismissed the business interruption claim. The insured has to prove coverage, and no document in the record showed the company had bought it (Express Rent-A-Car v. U-Save, E.D. La. 2009). Before a storm, get a complete certified copy of your policy, with every endorsement, and confirm it includes business income coverage with high enough limits.
Past results do not guarantee a similar outcome.
Business claim underpaid? 504-834-4000. Back to Louisiana Hurricane Insurance Claims