Every business, regardless of size or area of specialization, can suffer damages from external or internal courses. Such events may force a business to cease operations due to a moral obligation or lack of resources. In the event that your business finds itself in such a situation, you’ll need to rely on business interruption insurance to stay afloat throughout that period. So, what exactly is it?

Well, by definition, it’s an insurance meant to cover a business after a disaster. Technically, it’s supposed to put the company in the same financial position it would have been if the disaster never happened. In other words, the business will receive an amount equivalent to its projected profits. The people that require this cover the most are those whose businesses rely on their physical location to operate. They face a lot of risks since properties and other resources can easily be lost. If your situation falls under the category defined here, you can claim compensation from your insurer. Read on to find more about this subject.

Business Interruption Claim

What’s a business interruption claim?  It can be simply defined as a legal request for compensation after business losses due to a disaster or an uncontrollable cause. A good example is the current pandemic, the impact of which may affect businesses for up to 18 months before they can fully recover. However, filing a claim based on COVID-19 pandemic may not be an easy take given the fact that it’s a worldwide disaster. Depending on the subscription or the insurance company you choose, your business could be eligible for at least one of the following types of compensations.

The first one is basic and is offered to all subscribers of the business interruption insurance. It covers a company throughout the restoration phase until the business is up and running again.

There are two other compensations you could receive, but these are more of an extension to the aforementioned. One of these remain active until the business is gaining returns equivalent to its pre-loss season. The final one is offered to the insured if they lose the target consumers or suppliers due to a disaster. However, it’s not always a straightforward process, which is why one may need an advocate.

If your previous business interruption claims were denied, you could still be entitled to a compensation.

Best Practices To Keep In Mind

Recovering from losses due to natural disasters is not easy, even for big companies in any industry. As such, you can—and should—consider filing a business interruption claim to help you get back to normal operations. Since it can be quite frustrating, here are some of the things you should keep in mind to ease the whole process.

  • First, make sure you notify the insurer as soon the event occurs. Giving them a call would be the fastest method, but also remember to send an email for reference.
  • If your copy of the insurance policy was destroyed during the disaster, ask the company to send you another one immediately.
  • Review the policy thoroughly and capture all the important areas. If possible, you can do this with your lawyer for a better interpretation of the terms and conditions included in the copy.
  • Once you’re aware of all limits and deductibles, you can go ahead and file your claim considering the information you now have with you. This will save you time and other resources that you could have used documenting losses that may not be covered by the insurer.
  • Ensure that you practice careful and excellent record-keeping as this is what will determine the success of your case. Organize your bookkeeping to show the costs related to the disaster, as well as all invoices that might come in handy in the process.
  • Bear in mind that you might also need to submit the receipts of the money used to repair your property, if any.
  • In addition, you should know how to calculate your business insurance claim. As such, you’ll have an idea as to how much to expect from the insurance company if the case is successful.


A business interruption claim is one made by a business after it suffers losses due to a disaster or an uncontrollable cause. It can either be fire, theft, or even the current COVID-19 pandemic, which has paralyzed many business operations. There are three types of compensations for which you could be eligible, depending on the deal you signed. Filing these claims is not a straightforward process, but you can make it a lot easier by following some of the recommended best practices in the article.


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