Documentation for a Possible COVID-19 Business Interruption Claim
The new coronavirus (COVID-19) outbreak continues to be a top-of-mind concern for organizations and individuals across the globe. As COVID-19 becomes increasingly widespread, it’s not only raising fears about the well-being of the general public, but it’s also disrupting business operations and creating insurance exposures.
In fact, COVID-19 has already led to business interruptions, supply chain issues and significant liability concerns — all of which can lead to claims. In most business interruptions policies, coverage is only triggered if there is physical damage to the insured property. Determining coverage for a loss will depend on the policy language and its interpretation. Actions taken by federal and state authorities may also impact coverage.
While COVID-19 introduces a level of uncertainty when it comes to available insurance protection, having the appropriate documentation can help you prepare for a claim, if covered.
- Timeline of business impact, including dates of slowdowns or shutdowns
- Copies of signed civil authority shutdown orders
2. Business Metrics
- Track operational metrics such as production statistics, inventory, price data, material expenses, etc.
- Financial records to show year over year impact, including profit and loss statements, invoices and purchase orders
3. New and Increased Expenses Incurred to Respond to Pandemic
- Expenses incurred to respond to pandemic - cleaning costs, protective equipment, addition of new/temporary employees, overtime, etc.
- Maintain purchase orders, invoices, receipts, credit card bills, expense reports, payroll support and other
- underlying supporting documentation
4. Specific Activity Related to the Interruption
- Record the reason for the loss of income
- Keep a log of business interruptions (event cancellations, ticket refunds, cancelled orders, returns, penalties, loss of key employees, operating hour impacts, client complaints, etc.)
- Keep a log of employee impacts such as layoffs, remote work, etc.
- Payroll allocations, separating those paid without working
- Record of employees, clients or visitors known to have contracted COVID-19 at your facility
- Contracts of affected clients and vendors
Documentation needed to support a business interruption claim varies by business type and industry. Planning ahead for a possible claim can help ensure a smooth process.
For additional protection, it’s important for businesses to seek the help of a qualified insurance broker. These professionals can help you review your insurance programs and recommend potential solutions to address your exposures. For more information, please contact a member of our team.