The facts and circumstances of each claim will dictate the nature and quantity of documents collected. Generally, the following records will be requested from the insured: monthly profit and loss statements, monthly sales tax returns, leases, payroll records, and any internal sales forecasts that were prepared prior to the date of loss.
The period of restoration (“POR”) covers the time that it should take the insured to repair or restore the damaged property to its previous condition. The POR starts at the date when physical damage to the insured’s property occurs and ends when the property should be repaired or when the business resumes operations at a new location.
Continuing expenses are normal operating expenses that are incurred during the POR. Typical continuing expenses include rent, salaries, and insurance. When examining this particular aspect of the business income loss, the policyholder should be able to demonstrate that those expenses are necessary to continue and that they, in fact, continued.
Because these businesses do not have a significant sales history, the business interruption claim may be supported by the insured’s internal projections, budgets, and 3rd party industry statistics.
This coverage provides indemnification for continuing business income losses that occur after the POR ends. The applicable extended period of time for this coverage is defined in the insurance policy. One of the primary areas of dispute in this context is the cause of lost sales during this period. Generally, there should be a causal link between the decline in sales and the damage that took place during this period, and not due to other unrelated factors.
