The basics
- What it is
- Coverage, if included in a commercial policy, for lost net income and certain continuing expenses while operations are suspended by covered damage.
- Waiting period
- Many policies include a waiting period before income loss is covered; check the declarations.
- Extra expense
- Some policies pay reasonable costs to keep operating, such as temporary space or overtime.
- Civil authority
- Some policies address closures ordered by authorities after nearby damage; terms vary.
- Who decides
- The tenant's insurer, based on the policy and the records the tenant provides.
Why restoration decisions affect the claim
The length of a business interruption claim is tied to how long it reasonably takes to repair the space. That makes the restoration schedule part of the claim. A tenant who can reopen part of a shop while the rest dries may be expected to do so, and an owner who delays rebuilding can extend everyone's losses.
Phased work is one of the main tools. Drying and cleaning a restaurant's dining room first, while the kitchen is repaired, might allow takeout service. Isolating a damaged corner of an office floor with containment can let staff return to the rest. Ask the restoration contractor and building engineering what is safely possible, and write down what was offered and why it was or was not used.
Downtown tenants also face disruptions they did not cause: a closed lobby, an elevator out of service, a sidewalk blocked by equipment. Note those dates; whether they are covered depends on the policy.
Records a tenant should start gathering
- Sales or revenue records for the same period in prior years.
- Daily or weekly figures for the months right before the loss.
- Payroll records showing who was kept on and who was sent home.
- Receipts for temporary measures: equipment rental, storage, relocation, overtime.
- Dates the space was closed, partly open, and fully reopened.
- Communications with the landlord about access and repair timing.
- Spoiled inventory lists with photos, especially for food and retail stock.
Questions for the tenant's agent or adjuster
- Does my policy include business income and extra expense coverage?
- What waiting period applies, and when does the clock start?
- Will you accept a forensic accountant's analysis if the claim is large?
- Are losses from building-wide access problems covered, or only damage in my space?
- What documentation do you need to approve temporary relocation?
General information for Downtown Denver, not a quote or professional advice. In an emergency, call 911.