With business interruption insurance, ‘if in doubt, file a claim’

Business Report

Business interruption insurance might not cover every loss a business experiences after a disaster like Hurricane Ida, but it never hurts to file a claim, experts say.

“If in doubt, file a claim,” says Chris Jones, an attorney with Keogh Cox whose practice includes business law and litigation. 

Jones participated in a question-and-answer session on the topic hosted online by the Baton Rouge Area Chamber, along with Jason MacMorran with Postlethwaite & Netterville and Clint McCullough with McGriff Insurance. Questions they addressed include: 

What can I claim?

Policies will vary. Physical damage, power outages, additional expenses incurred because of the interruption, and closed streets preventing customers or employees from getting in are all possible, along with industry-specific claims like food spoilage for a restaurant owner. 

Some insurers may give you the benefit of the doubt, while others may use an obscure policy clause to rule out your claim. Physical damage will come with a deductible and a limit to how much you can claim, though there should be no limit on potential claims for additional expense. In some cases, there may be gray areas because terms like “loss” and “damage” are not defined. “The big print giveth and the little print taketh away,” McCullough says.

What records should I have to support a claim?

At least two or three years of historical financial information for a baseline, along with all records of additional expenses tied to the interruption. If records are missing or damaged, seek backups. For example, your CPA might have a copy of your tax return if you don’t. 

How should I deal with adjusters? 

It’s pretty much the luck of the draw as to how good your adjuster will be and how familiar they will be with Louisiana. Be diplomatic with them during the first 30 days, which is likely to be a “manic” time, and try to give them everything they need to make it easy for them to justify paying the claim to their bosses. 

What do I do if my claim is rejected?

Get a professional to review the denial letter, which the insurer must give you if they deny your claim. Make sure your insurer understands what you’re trying to claim. 

If I sue, what happens next?

More than 3,000 lawsuits have been filed over claims from hurricanes Laura and Delta. Most are over the amount of the claim, not whether the claim is valid. In the Western District of Louisiana, the courts have tried to put everyone into a settlement process to avoid full-blown litigation, and the Middle District that includes Baton Rouge likely will take a similar approach.

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