The historic snowstorm of Oct. 29 blanketed much of Connecticut with heavy wet snow causing power outages lasting, in some cases, up to 12 days. Businesses throughout the state were forced to shut down, resulting in lost sales and extra costs.
Fortunately, for some of the impacted businesses there may good news. For businesses with insurance policies that permit it, a business interruption claim can be filed which may allow for the recovery of some of the losses incurred during the days they were forced to close down.
Here are some initial steps business owners should follow:
• Contact your insurance carrier and discuss your areas of coverage. Determine the limits on property damage and ask if you are covered for off-premises power outages.
• Put your insurance carrier on notice that you may have a claim. They will assign you a claim number and establish a record of your potential claim.
• Determine the deductible for each type of coverage. This is the amount that your business must pay out-of-pocket before any insurance reimbursement.
• Identify areas of possible loss including wages paid to employees while your business was closed, loss of sales, disruption to on-line sales, inability to obtain product from suppliers and additional expenses incurred to get up and running.
• Gather documentation to support lost sales and additional expenses, including payroll records, historical sales and expense records and invoices for additional expenses incurred.
Preparing a business interruption insurance claim can be a challenge. It requires detailed information and documentation presented in a supported and understandable manner. Your insurance carrier may assign an accounting firm to work on your claim; remember, that firm is working for the insurance company and not for you or your business. Business owners should protect their interests by engaging professionals to help document and prepare the calculations necessary to submit a complete and substantiated claim and to interface with the firm assigned by your carrier.
Finally, for those businesses not covered for losses incurred, now is the perfect time to revisit all of your insurance coverage and needs with your broker or agent.
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Richard P. Finkel is a partner with BlumShapiro, the largest regional accounting, tax and business consulting firm based in New England, with offices in West Hartford and Shelton as well as in Boston and Rockland, Mass. Contact him through the firm’s website at blumshapiro.com.
