If a business must close because the premises are damaged by a natural disaster, such as a flood, hurricane, or windstorm, fire, the business may suffer a substantial financial hardship. While commercial property insurance may rebuild the physical structure, replace damaged or lost equipment, some businesses purchase business interruption coverage to compensate for extra expenses, lost income, or additional operating expenses as they restore operations after a covered loss.
The purpose of a business interruption policy is to restore the commercial enterprise to the economic position it would have enjoyed had there not been an insurable loss. That’s the primary reason Texas businesses buy these types of policies.
A business interruption insurance policy compensates the business for some operating expenses and lost income if the workforce and management are forced to vacate the premises because of a policy-covered loss:
Most commercial property insurance doesn’t include flood coverage. If the business owner purchased separate policies for windstorm or flood coverage, these policies may include coverage for business interruption as well. A business interruption policy probably won’t include losses from loss of electricity, earthquake, evacuations related to severe weather, disease pandemic, or terrorism that doesn’t directly damage the premises.
For this reason, it’s imperative to understand what the business interruption policy covers and its dollar limits.
Four coverage types are associated with business interruption insurance:
On paper, a business interruption insurance policy sounds like an excellent financial management tool for all Texas business principals. When the time comes for the insured to use the policy after a windstorm, flood, fire, hurricane, and the like–when it’s time to submit business interruption claims and receive payments to cover damage and loss–the insurance company who sold the policy may substantially undervalue its insured’s losses or deny the claim.
If you submitted valid business interruption claims, the law in Texas requires the insurer to promptly pay the claims. When your insurer acts in bad faith, you need an experienced business interruption claims attorney as soon as possible.
The Mindiola Law Firm provides clients with aggressive representation, excellent service, and results when quantifying commercial losses or assessing the impact of a disaster is necessary. If your insurer has acted in bad faith, discuss a potential business interruption claim with our experienced Texas first-party insurance claims lawyers. We’ll work with you to address your concerns. Our network includes financial experts who will assess and present a clear picture of your total losses to the insurer. Call us now at (877) 420-4753.