Business Interruption Insurance

Businesses across Canada are feeling the loss at all levels including restaurants, bars, entertainment venues, schools, charitable organizations and professional service providers.

Has Your Business Interruption Insurance Claim Been Denied?

Recent media updates have indicated insurers are not ready to payout claims for business interruption insurance caused by COVID-19. The WHO officially designated the recent outbreak a pandemic just last week. This qualification means hard working Canadians may rely on this coverage to keep their business afloat during the work stoppage.

Even after the virus persists in an area, re-contamination could occur again and extend your period of coverage. It is essential that every business owner full understands what they are entitled to under their business insurance policy.

Professional Service Provider or Business Owner?

Contact us for a free analysis today to determine if you are eligible for Business Interruption insurance coverage.

What is business interruption insurance?

Business interruption insurance is a type of insurance that covers the loss of income that a business suffers after a disaster. The income loss covered may be due to disaster-related closing of the business facility or due to the rebuilding process after a disaster.

Many professional services companies have clauses in their coverage which allow for coverage in the event of a pandemic.

These could include but are not limited to:

  • Doctors
  • Lawyers
  • Accountants and Accounting firms
  • Dentists

“This is classic insurance tactics,” said Jeremy Diamond, Senior Partner at Diamond and Diamond Lawyers. “Hours after the government took steps to protect its citizens, they were pushing a media narrative that indicated they would be denying claims on a large scale.”

While not all insurance policies include extra coverage for pandemics, thousands of businesses across the country are eligible for business or supply chain interruption payouts. Manufacturers are shutting doors and business continuity may be affected into as late as fall. While the government is taking steps to mitigate against economic loss it may not be enough to lessen the fallout.

If your business model has been interrupted your insurance may cover:

  • fixed costs
  • supply chain losses
  • payroll losses
  • loan payment losses
  • revenue losses
  • relocation costs
  • physical loss/damage or destruction
  • miscellaneous incurred expenses

“Every policy is different so it’s important that a lawyer combs through your policy and analyzes the facts and policy language,” said Sandra Zisckind, managing partner at Diamond and Diamond Lawyers.

According to

Policies may provide coverage for business income loss due to interruptions in the supply chain through contingent business interruption coverage (i.e., customers, suppliers) or dependent property coverage (i.e., manufacturers, locations that accept products). The reason for this interruption must be due to a covered cause of loss.

Under the “civil authority” coverage, if a government agency prohibits access to the business’s premises, the resulting business losses may be covered. This clause usually requires that a covered cause of loss cause damage to another property within a certain distance from the insured business.

Are you a professional service provider or owner of a business in Canada? You may be entitled to coverage under your policy.

Contact our firm for a free analysis today to determine if you are eligible for Business Interruption insurance coverage.

Our firm has experience taking on big insurers who have denied legitimate claims to their policy holders.

Professional Service Provider or Business Owner?

Contact us for a free analysis today to determine if you are eligible for Business Interruption insurance coverage.

FAQ About Business Interruption Insurance

What is covered by business interruption insurance?

Business interruption insurance covers a wide range of things. It replaces business income in case of a disaster. Such events include fire, floods or any other natural disaster. Profits is also one of the fields covered by the policy. Based on previous performances, a policy provides reimbursement for profits that would have been earned in case the disaster didn’t happen. Fixed costs is another thing covered under this insurance. It includes the operating expenses as well as other total costs incurred while a business is interrupted

How is business interruption insurance calculated?

There are certain parameters that determine how business interruption insurance is calculated. To begin with, the cost of moving is calculated. Some businesses will be able to temporarily move their premises during the reinstatement period. Additional costs incurred here will have to be considered. Additionally, any expected saved expenses should be included. Some businesses may not be able to operate normally after the premises are reinstated. In such situations, it is very important to calculate any savings that may come up such as building services, maintenance, utility bills among others.

How long does business interruption insurance last?

A good number of commercial property insurance policies provide for both time coverage and property damage. The insurer will agree only to incur the cost of repairing or replacing the covered property. They also agree to pay for the lost business income for a certain period of time. Usually, this period is from the date of the loss till the time the damaged property can be replaced or repaired. These costs should be catered by the insurer.

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