Good claim documentation is only one of the cornerstones to affect a positive claim settlement. Preparing for the claims will help manage the expectations of everyone involved and ensure that prompt review of your claim is probable.
Good claim documentation is only one of the cornerstones to affect a positive claim settlement. Preparing for the claims will help manage the expectations of everyone involved and ensure that prompt review of your claim is probable.
In the coming weeks and months, we expect to see a lot of discussion, and ultimately litigation, concerning the interpretation of insurance policy provisions and whether or not coronavirus-related claims will be covered under existing business interruption policy coverage.
Currently, several states—including Massachusetts, New York, New Jersey and Ohio—have pending legislative bills that, if passed, will require insurers to cover COVID-19 related losses and expenses under existing business interruption insurance policies. It is unknown, at this time, whether these bills will ultimately pass or whether other states will propose similar legislation.
Due to the ever changing landscape concerning this coverage, businesses with current business interruption policies should consider compiling information as preparation to file a claim. Timely filing may help accelerate any approved payments. Additionally, this information may be necessary across other platforms, including but not limited to, tax filing, valuation, loan applications, etc. Business interruption losses are among the most confusing types of claims in the insurance industry. As the economic impact of COVID-19 evolves, keeping a log of dates, costs and details of what happened will be an important part of quantifying a claim.
After a careful review of the policy to understand coverage, notice requirements and/or deadlines to preserve rights, a Loss Management team should be created that includes both internal and external expertise. Some common expertise:
Depending on the policy wording, the lost profits may be based on lost production or lost sales. The following financial information, at a minimum, should be compiled to determine the lost profits:
Good claim documentation is only one of the cornerstones to affect a positive claim settlement. Preparing for the claims will help manage the expectations of everyone involved and ensure that prompt review of your claim is probable.
Disclaimer: The contents of this resource are for general informational purposes only. While every effort has been made to ensure its accuracy, the information is provided “as is” and no representations are made that the content is error-free. We have no obligation to update any content, comments or other information for retroactive or prospective interpretations or guidance provided by regulators, financial institutions or others. The information is not intended to constitute legal advice or replace the advice of a qualified professional.