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Business Interruption Insurance

by Michael Fleming on Nov. 08, 2017

 General Practice 

Summary: After the devastation that Hurricane Harvey unleashed on Texas, many people and businesses are wondering how they will rebuild. Even after the floodwaters receded, evidence of the flood and the damage it caused is everywhere.

After the devastation that Hurricane Harvey unleashed on Texas, many people and businesses are wondering how they will rebuild. Even after the floodwaters receded, evidence of the flood and the damage it caused is everywhere. Risk modeling predicts losses to all properties from the flooding to be around $75 billion.

There is a specific type of insurance designed to protect businesses that suffer after disasters, known as business interruption insurance, and it is focused on addressing any income loss that occurs due to having to close the business because of a disaster and/or the rebuilding process after the disaster. This is because programs like the National Flood Insurance Program do not offer coverage for lost income to businesses.

That is not to say that we do not see insurance companies wrongfully denying legitimate insurance claims on a regular basis. As reported in this recent news article, whether it is citing buried, vague, ambiguous exclusions in the fine print of the policies, or disagreeing on how to measure the lost income, business interruption claims can be “among the trickiest in an industry renowned for complexity,” warranting working with an experienced civil lawyer if you are filing such a claim.

The Devastation Left by Hurricane Harvey

Now that Hurricane Harvey has left Houston, businesses have to start looking towards recovery and rebuilding. Business interruption insurance is designed to cover things like profits that would have been realized had the business stayed open, as well as operating expenses that continued to be incurred when the business had to stay closed.

Unjustly Denied Claims

However, plenty of businesses that have been paying premiums totaling more than $1,000 per month are now finding insurers rejecting their claims under the justification that, for example, the business was not “physically damaged.” Others are also finding their claims denied after several days without power. This is especially overwhelming, as insurance companies brace themselves to receive thousands of claims from businesses in both Florida and Texas.

Some disagreements center on what constitutes business income, the net income, and continuing normal operating expenses, including payroll, as well as any extra expenses you incurred during the restoration that you otherwise would not have but for the damage to your property. Regardless, your coverage is supposed to cover all loss suffered during the time it takes to repair or replace the property.

Houston Denied Insurance Claims

Many businesses are now preparing themselves for a long slog with insurance companies as they try to make claims on their business interruption policies. Houston, Texas civil attorney Michael P. Fleming is uniquely qualified to handle issues that come up, as he is certified in both personal injury trial law and real estate law. Contact us today to receive a free case evaluation and find out how we can help.

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