How To Dispute a Business Interruption Settlement Offer

Business interruption insurance compensates you after extreme events that could disrupt your business, including fires, hurricanes, vandalism, and more. What do you do if your insurer gives you a lowball settlement offer that doesn’t come close to covering your losses? Talk to a business interruption lawyer to discuss your options.

Why Insurers Deny or Devalue Business Interruption Claims

Business interruption insurance policies usually cover lost revenue, employee wages, and ongoing costs like rent and utilities. Depending on your policy terms, you may also claim compensation for temporary relocation costs and other expenses related to the covered event.

However, sometimes, it’s unclear whether a specific event or expense fits your policy. You may run into problems with your claim because of:

Disputed coverage. Your insurer may argue that your policy doesn’t cover the disruptive event, such as denying compensation for a natural disaster outside a certain geographic radius.
Undervalued losses. The insurance adjuster handling your claim could downplay your lost revenue and other accident-related expenses, especially if your income often fluctuates.
Policy limitations. Your policy might include caps on losses. In this case, you may be unable to claim compensation for the full extent of your losses.

How Can You Push Against a Low Settlement Offer?

Handling an insurance claim after a business-disrupting event can be more complicated than you think. If you received a lowball offer from your insurer, a business interruption lawyer could help you achieve a fairer settlement. Your attorney might suggest one or more of the following strategies.

Force a Negotiation

An experienced business lawyer can be a game-changer when dealing with insurance companies. Insurance adjusters are likelier to make a fair offer when negotiating with a skilled legal professional well versed in your policy’s terms.

File an Appeal

If your insurance company denied your claim, a lawyer can help you appeal this decision. Your attorney will review the Disclaimer of Coverage document to understand why the insurer refuses to settle your claim and draft your appeal accordingly.

Insurance companies usually give their clients limited time to appeal a denied claim, so act quickly. If you initially tried to handle the claim yourself, now is the time to bring a business interruption lawyer on board.

Take Legal Action

What if your insurer still denies your claim? If your lawyer estimates you have a solid case, you could sue the insurance provider for breach of contract. In this scenario, working with an experienced litigator ready to advocate for your rights in the courtroom is critical.

Some insurers are likelier to compromise when facing a lawsuit. Your insurance company may decide to make you a better settlement offer rather than navigate a trial.

Protecting Your Rights After a Disruptive Event

If you sustain major losses after an emergency disrupts your business, you should:

Record the damage. Gather photos, videos, police reports, and other documentation proving the damage your business suffered.
Provide accurate financial records. Organize your income and expense statements, payrolls, and interruption-related costs.
Read your policy’s fine print. Make sure you understand what your policy covers and what documents should accompany your claim.
Talk to a lawyer. A business insurance lawyer will help clarify your policy’s terms and guide you through the claim process.

Warner & Fitzmartin, PLLC: Helping Entrepreneurs Navigate Business Interruption Claims

Does your insurance provider underestimate the losses a disruptive event caused your business? Call us at Warner & Fitzmartin. Our dedicated business interruption lawyers will review your policy and work hard to negotiate a fair settlement on your behalf.