Many different scenarios may lead to property and business interruption losses. Fires, natural disasters, cyberattacks, and problems with the supply chain can keep a business from functioning properly for months, if not longer. In the wake of destructive events, companies may have to repair their buildings and equipment, temporarily or permanently relocate, and/or replace their inventory. All these setbacks cost companies time and money. What’s more, a business that cannot operate at full capacity continues to lose money and revenue while their costs accrue. This imbalance caused by property and business interruption losses can be significant enough to cause businesses to shutter permanently. Businesses of all sizes, across a broad spectrum of industries, must develop strategies to limit their property and business interruption loss risks.

What are Property & Business Interruption Losses?

It’s not only catastrophic natural disasters that can jeopardize the normal functioning of businesses. Often, businesses are shut down by seemingly smaller issues, and managing interruption losses involves understanding the details of specific businesses and determining what kinds of threats are most likely to impact a specific business. Once a company has determined the most likely risks of interruption, the company can craft a strategy for managing these risks. For example, actions may be taken to reduce the likelihood of a long-term business interruption loss, such as installing sprinklers to prevent against fire damage, providing proper maintenance to equipment to prevent unexpected downtime, having more than one supplier so that no company is ever dependent upon one single vendor, and installing security equipment to deter vandalism and theft.

Procuring the proper insurance coverage is key to any business interruption risk management strategy. Business interruption insurance is designed to pay the company for income lost when operations are disrupted by an insured event. In addition to carrying property insurance to cover the cost of rebuilding, replacing, or repairing the business’s physical assets after a loss, businesses should carry business interruption insurance to replace revenues lost and cover incremental costs during the business interruption.

Property & Business Interruption Losses: How We Can Help

The insurance coverage and litigation attorneys at Payne & Fears have decades of experience managing property and business interruption losses. We assist policyholders and other stakeholders when presenting business interruption claims in order to avoid landmines and maximize recovery. When a claim cannot be resolved satisfactorily, our skilled insurance coverage attorneys litigate aggressively against insurers who deny—or refuse to pay in full—business interruption claims.