Talking about Business Income...

What is business income insurance?

Business income is the reduction of the insured’s net income, plus continuing normal operating expenses. It may be business income other than rental value, or limited to rental value only.

What can I do to help resolve my business income claim?  (By Safeco)

• When possible, make sure your accountant is available
• Maintain an accurate record of sales and operations expenses that continue after a loss
• Maintain accurate records of extra expenses
• Communicate with clients/customers describing when and how operations will resume
• Consider and implement reasonable action to avert or mitigate loss. This may include but isn’t limited to:
  • Continuing partial operations to the extent feasible
  • Rental of a temporary facility
  • The expedition of repairs or replacement of stock and equipment to resume business
  • Outsourcing of some operations to other organizations.

Note: This is general information. Policy provisions will vary by policy and state. This information does not change or supersede your policy provisions. Local statute or regulations may affect coverage.

What can I expect to happen during a business income claim?  (By Safeco)

Every claim is different, and various policy provisions, state statutes, and regulations apply, which may result in different requirements and results. However, in resolving a business income loss claim, the claims professional will often take the following steps:

• Determine coverage and damages. You can expect the claim examiner to meet with you in person or over the phone in the first days after the loss to explain the claims process, and help you understand what is needed to resolve your claim.
• Gather documentation. The claim examiner will explain the information needed to resolve the business income portion of your claim.
• Determine the amount of business income loss. You can expect our examiner to work with you, along with your accountant or representative, and possibly an independent forensic accountant, to determine the business income loss.

The amount of time it takes to complete these steps depends on the complexity of the loss, the availability of documentation, and other factors.

What is a waiting period?  (By Safeco)

Some policies contain a provision that states that the period of restoration starts after 72 hours post-loss. The initial 72 hours without business interruption coverage is the waiting period.

What are non-continuing expenses?  (By Safeco) 

These are normal expenses that do not continue during the period of restoration. Expenses that do not continue may reduce the loss the insured would otherwise incur.

What is the "period of restoration"?  (By Safeco)

This is the length of time immediately after the time of loss, or after a stated waiting period. It ends when the property should be repaired, rebuilt, or replaced, or the date business is resumed at a new permanent location. See also “What is a waiting period?”

What is extra expense?  (By Safeco) 

These are necessary extra expenses during the period of restoration that a business would not have incurred had there been no loss or damage to covered property. Coverage includes expenses incurred to:

• Avoid or minimize the suspension of business and to continue operations, OR
• Minimize suspension of business if operations cannot continue, OR
• Minimize suspension of business if operations cannot continue, OR

The latter is covered only to the extent that it reduces the amount of loss that would otherwise be payable.

What is co-insurance? (By Safeco)

It is a provision in some insurance policies that requires the insured to carry an amount of insurance equal to or greater than a specified percentage of the total insured value of the property or exposure at risk.

What  is business income loss from dependent properties? (By Safeco)

This is the business income loss from suspension of the insured’s operations because of loss or damage to the property of organizations the insured is dependent on, but doesn’t own or operate.