Quantifying, supporting, and defending a business interruption insurance claim is a complex process that involves in-depth analysis, a partnership with the insured business and broker, and expertise in the art of simplifying the complex.
A complex business interruption claim must contain unbiased schedules and analyses, and it should be presented in an industry-standard format to expedite the review process. Many of Hutson Resource Group’s projects contain the following elements.
Business interruption or lost business income
After a disaster or destruction, a damage valuation report documents lost profits and continuing expenses. An accurate damage valuation is an integral component of settling a business interruption or lost business income claim.
An extra expense claim is typically pursued when additional expenses are required to continue operations (partially or fully) following a business interruption. An extra expense claim includes the operational expenses that would not have been incurred “but for” the loss. This claim also covers the temporary increase in normal expenses during the affected period.
Contingent business interruption and contingent extra expense
Contingent business interruption claims and contingent extra expense claims are generally filed when there is a loss in profitability because of decreased sales or increased expenses due to physical damage at a client or supplier’s location. In this situation, the subject business loses sales or is required to spend extra money to source items from third parties.
Inventory, stock, and contents
Losses to inventory and stock may trigger a business interruption loss. This type of loss may affect inventory turns resupply to clients. It may also trigger extra expenses, as in a case where a business is forced to purchase lost inventory items from a third party to avoid loss of sales.
Construction delays and soft costs
When a loss occurs at a construction site, additional costs may be incurred due to rescheduling and delays. Additionally, costs such as interest on loans may be pushed far beyond original projections. Finally, because of property damage, there may be delays in generating expected revenue.
Property and asset damage quantification
When a business interruption is caused by an event such as a fire, hurricane, or roof collapse, a business may have extensive physical damage to its property or assets. Hutson Resource Group can provide appropriate experts to quantify property and asset damage across a wide range of fields, including the following:
- Construction scope and estimating
- Mechanical engineering
- Electrical engineering
- Industrial hygiene
- Soil and erosion