How to File a Business Interruption Claim

File business interruption claims by documenting losses, calculating coverage, and submitting required forms with financial proof.

1. Review your policy coverage and waiting periods. Pull your policy and identify your coverage limit, waiting period (typically 48-72 hours), and covered perils. Most policies cover lost income plus continuing expenses like payroll and rent. Note exclusions — many standard policies exclude pandemic, cyber incidents, or government-ordered closures unless specifically added.
2. Document the triggering event and business impact. Photograph property damage, collect police reports, and save all communications about the incident. Record the exact dates your business was closed or operating at reduced capacity. Get written statements from employees, vendors, or customers if they witnessed the event or impact.
3. Calculate your actual loss of income. Use your P&L from the same period last year as baseline income, adjusted for growth trends. Subtract actual income earned during the interruption period. Include lost revenue from cancelled contracts, delayed projects, and customers who went elsewhere. Factor in any mitigated income from alternative operations.
4. Track continuing and extra expenses. List expenses that continued despite closure — rent, insurance, loan payments, key employee salaries. Document extra expenses incurred to minimize the interruption — temporary location costs, overtime to catch up, expedited shipping. These are typically covered up to the amount they reduce your overall loss.
5. Prepare financial documentation package. Compile 3 years of tax returns, monthly P&Ls, bank statements, and accounts receivable records. Include contracts showing lost future income and vendor invoices proving continuing expenses. Have your CPA prepare a certified loss calculation worksheet showing pre-loss income trends and post-loss impacts.
6. Submit claim and negotiate settlement. File within policy deadlines (usually 60-90 days). Submit all documentation with a detailed claim letter explaining the loss calculation. Expect the insurer to send an adjuster and potentially hire a forensic accountant. Be prepared to justify every line item and negotiate based on policy language and actual financial impact.