Can a Business Claim Revenue Loss After Flood Damage?

Standard commercial property insurance covers physical damage to your building and inventory. It does not automatically cover the income you lose while your business is closed for repairs. To claim lost revenue, you must have purchased business interruption insurance or a similar endorsement.

This specific coverage is designed to replace lost net income during the restoration period. It can also help pay for ongoing expenses like rent, payroll, and loan payments. Policies vary, and your insurer decides what is covered.

Your first priority is to stop the water source and ensure safety. Then, contact your insurance agent immediately to report the damage and discuss your policy's specifics. Document everything with photos and videos before any cleanup begins.

Next, contact local water damage pros to start the drying and restoration process. Their detailed report on the extent of damage and estimated repair time will be vital for your claim. Keep meticulous records of all communications and expenses.

• Contact your insurance agent to report the loss.
• Take extensive photos and video of all damage.
• Contact local water damage pros to begin drying and restoration.
• Gather financial statements and tax returns from prior years.
• Track all extra expenses, like temporary relocation costs.
• Maintain a detailed log of all phone calls and emails.

Insurers may dispute whether the loss of income was directly caused by the physical damage. They might argue that a general economic downturn contributed to the loss. Having a clear cause-and-effect link documented by your restoration pros is essential.

Another challenge is accurately calculating the lost profits, especially for new businesses without a long financial history. Insurers may also scrutinize whether the loss was truly due to the physical damage or other economic factors. An attorney specializing in insurance law can help if your claim is unfairly denied.