If your business is disrupted by a hurricane, water damage, plumbing break, theft, fire or other hazard, the precise type and extent of your commercial coverage can have a significant impact on your ability to keep your company solvent and return it to profitability.  While your property damage coverage will provide the means to repair or rebuild damaged structures, business interruption coverage provides compensation for lost income while the business is shutdown or in the process of being repaired.  

What is the optimal approach for estimating long-term lost profits after a peril has damaged a business?

If you have historical sales figures that demonstrate an upward sales trend, this provides excellent support for establishing a growth trend for your estimated lost sales calculations.  Alternatively, sales forecasts and budgets that closely approximate actual sales numbers can also provide support of your claim.  An effective lost sales projection model entails presenting a projection that is consistent with the expected business environment.

What types of documents will typically be requested by your commercial insurance carrier?

While the unique facts and circumstances will dictate the precise documents that your insurance carrier will ask you to produce, some documents that are routinely sought to process a commercial claim include:

  • Inventories
  • Purchase orders and invoices
  • Profit and loss statements
  • Daily and monthly production reports
  • Cost accounting reports
  • Tax returns     

The accountant for the insurance company might ask you to verify some information in the General Ledger to obtain a complete picture of the financial condition of the business.

How can you expedite the insurance company's accountant’s review to facilitate prompt payment?

There are a number of steps you can take to encourage prompt and full payment.  Some of these steps include the following:

  • Provide the accountant for the insurance company with an overview of your company operations, so the accountant can better understand your business
  • Require a written document request, so you can track documents that have been provided and those that have yet to be provided to the insurer
  • Retain your own independent accountant to help you organize documents and information and prepare for questions from the insurer
  • Utilize classifications of the types of policy losses and describe the expenses included in your claim
  • Meticulously prepare a comprehensive claim that is well documented and properly referenced
  • Keep a careful log of the documents that you have provided, so you do not end up duplicating your efforts

How do external factors impact your company’s claim for lost profits?

The insurance company will investigate and consider all factors that impact your business, which include industry financial data and trends.  Businesses can experience a significant advantage if they prepare data and figures that establish favorable economic trends rather than leaving this inquiry entirely to the insurance company.

You can reach Miami Business Insurance Claims Lawyer J.P. Gonzalez-Sirgo by dialing his direct number at (786) 272-5841, calling the main office at (305) 461-1095, or Toll Free at 1 (866) 71-CLAIM or email Attorney Gonzalez-Sirgo directly at [email protected].

J.P. Gonzalez-Sirgo
J.P. Gonzalez-Sirgo, P.A.
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