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When a hurricane forces your Florida business to close, the physical damage to your property is only part of the story. Lost revenue, ongoing expenses, and the time needed to get back on your feet can be financially devastating. That’s where business interruption insurance claims in Florida become critical for survival.
This guide explains how business interruption insurance works, what it covers, and how to successfully file a claim after hurricane damage or other covered events. Whether you run a restaurant in Fort Myers, a retail shop in Tampa, or a service business in Miami, understanding this coverage could mean the difference between recovery and permanent closure.
What is Business Interruption Insurance?
Business interruption insurance (also called business income insurance) is designed to replace the income your business loses when it cannot operate due to a covered event. In Florida, this coverage is typically included as part of a commercial property insurance policy or Business Owner’s Policy (BOP).
What Business Interruption Insurance Typically Covers
- Lost income and profits: Revenue your business would have earned during the closure period
- Fixed operating expenses: Rent, utilities, loan payments that continue even when closed
- Payroll: Employee wages to retain your workforce
- Temporary relocation costs: Expenses to operate from an alternative location
- Extra expenses: Additional costs to minimize the interruption period
- Tax obligations: Ongoing tax burdens during closure
Important Coverage Limitations
Business interruption coverage typically has important limitations:
- Physical damage requirement: Most policies require physical damage to covered property
- Waiting period: Coverage often doesn’t start until 72 hours after the event
- Restoration period: Coverage continues only until repairs are completed or should have been completed
- Coverage limits: Maximum payout amounts and time limits apply
- Flood exclusion: Standard policies typically exclude flood damage (separate coverage required)
Types of Business Interruption Coverage
Standard Business Interruption
Covers income loss when your business property is directly damaged by a covered peril.
Contingent Business Interruption (CBI)
Covers losses when a key supplier or customer’s property is damaged, disrupting your operations. For example, if a hurricane destroys your main supplier’s facility and you can’t get inventory.
Civil Authority Coverage
Covers losses when government authorities restrict access to your business due to damage to nearby property. This was critical after hurricanes like Ian when barrier islands and coastal areas were closed to all but essential personnel.
Extended Business Income
Provides coverage for the period after repairs are complete but before your business returns to normal revenue levels.
How to File a Business Interruption Insurance Claim in Florida
Step 1: Review Your Policy Immediately
Before filing your business interruption insurance claim, understand exactly what coverage you have. Look for:
- Coverage triggers and covered perils
- Waiting periods
- Coverage limits and sublimits
- Reporting requirements and deadlines
- Required documentation
Step 2: Document Everything
Comprehensive documentation is critical for business interruption claims:
- Financial records: Profit and loss statements, tax returns, bank statements (ideally 2-3 years prior)
- Physical damage documentation: Photos, videos, and inventories of all property damage
- Operational records: Sales records, appointment books, inventory counts
- Extra expense receipts: All costs incurred to minimize the interruption
- Payroll records: Employee wages paid during closure
- Timeline documentation: When damage occurred, when you closed, when you reopened
Step 3: Calculate Your Losses
Your claim should include:
- Lost revenue: Compare actual revenue during interruption to projected revenue based on historical data
- Continuing expenses: Fixed costs that continued during closure
- Extra expenses: Additional costs to maintain operations or speed recovery
- Extended recovery period: Losses after reopening but before returning to normal
Step 4: File Promptly and Follow Up
Report your claim immediately. Document all communications with your insurer, including dates, times, and names of representatives. Follow up regularly and respond promptly to all requests for information.
Common Challenges with Business Interruption Claims
Insurance companies frequently challenge business interruption claims in Florida. Be prepared for:
- Disputed loss calculations: Insurers may challenge your revenue projections or expense calculations
- Coverage disputes: Arguments that damage wasn’t from a covered peril
- Period of restoration disputes: Claims that repairs should have been completed faster
- Documentation demands: Repeated requests for additional records
- Delays: Extended processing times, especially after major hurricanes
Frequently Asked Questions
Does business interruption insurance cover hurricane damage?
Typically yes, if your policy covers wind damage and your business suffers physical damage. However, flood damage usually requires separate flood insurance with its own business interruption component.
How long does business interruption coverage last?
Coverage typically continues for the “period of restoration”—the time needed to repair or replace damaged property. Some policies include “extended business income” coverage for 30-180 days after repairs are complete.
What if I don’t have business interruption coverage?
If you don’t have coverage, you may be able to access SBA disaster loans, FEMA assistance, or other relief programs after a declared disaster.
Should I hire an attorney for my business interruption claim?
Given the complexity of these claims and the amounts typically involved, consulting with an experienced commercial insurance attorney is often wise, especially if your claim is denied, delayed, or underpaid.
Get Help with Your Florida Business Interruption Claim
Filing a business interruption insurance claim in Florida after hurricane damage requires careful documentation, accurate loss calculations, and often persistent negotiation with insurers. The stakes are high—your business’s survival may depend on recovering these losses.
At Krapf Legal, our commercial property damage attorneys have helped Florida businesses recover millions in business interruption claims. We understand the complexities of commercial coverage and will fight to maximize your recovery.
Contact Krapf Legal today for a free consultation. Let us review your business interruption claim and help you get your business back on track.
