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Posted by Liz Cazeault on Mon, Apr 13, 2020 @ 10:36 AM

business interruption claimThe new coronavirus (COVID-19) outbreak continues to be a top-of-mind concern for organizations and individuals across the globe. As COVID-19 becomes increasingly widespread, it’s not only raising fears about the well-being of the general public, but it’s also disrupting business operations and creating insurance exposures.

In fact, COVID-19 has already led to business interruptions, supply chain issues and significant liability concerns — all of which can lead to claims. In most business interruptions policies, coverage is only triggered if there is physical damage to the insured property. Determining coverage for a loss will depend on the policy language and its interpretation. Actions taken by federal and state authorities may also impact coverage.

While COVID-19 introduces a level of uncertainty when it comes to available insurance protection, having the appropriate documentation can help you prepare for a claim, if covered.


1. Timing

  • Timeline of business impact, including dates of slowdowns or shutdowns
  • Copies of signed civil authority shutdown orders

2. Business Metrics

  • Track operational metrics such as production statistics, inventory, price data, material expenses, etc.
  • Financial records to show year over year impact, including profit and loss statements, invoices and purchase orders

3. New and Increased Expenses Incurred to Respond to Pandemic

  • Expenses incurred to respond to pandemic - cleaning costs, protective equipment, addition of new/temporary employees, overtime, etc.
  • Maintain purchase orders, invoices, receipts, credit card bills, expense reports, payroll support and other
  • underlying supporting documentation

4. Specific Activity Related to the Interruption

  • Record the reason for the loss of income
  • Keep a log of business interruptions (event cancellations, ticket refunds, cancelled orders, returns, penalties, loss of key employees, operating hour impacts, client complaints, etc.)
  • Keep a log of employee impacts such as layoffs, remote work, etc.
  • Payroll allocations, separating those paid without working
  • Record of employees, clients or visitors known to have contracted COVID-19 at your facility
  • Contracts of affected clients and vendors

Documentation needed to support a business interruption claim varies by business type and industry. Planning ahead for a possible claim can help ensure a smooth process.

For additional protection, it’s important for businesses to seek the help of a qualified insurance broker. These professionals can help you review your insurance programs and recommend potential solutions to address your exposures. For more information, please contact a member of our team.

Looking for COVID-19 resources? Visit our resource center for expertise on impacts to expect and how your business can respond.

© Copyright 2018 CBIZ, Inc. and MHM. All rights reserved. Use of the material contained herein without the express written consent of the firms is prohibited by law. This publication is distributed with the understanding that CBIZ is not rendering legal, accounting or other professional advice. The reader is advised to contact a tax professional prior to taking any action based upon this information. CBIZ assumes no liability whatsoever in connection with the use of this information and assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

Tags: COVID-19

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