What is a Business Interruption Claim?

A business interruption claim is an insurance claim that compensates for income lost due to a covered event that temporarily halts or reduces business operations. This type of claim typically includes:

Lost profits
Operating expenses that continue during the interruption
Additional costs required to minimize the impact

Calculating these figures accurately is crucial, as underestimating losses can result in insufficient recovery, while overestimating may trigger scrutiny from insurance companies.

Step 1: Gather Financial Records

The first step in calculating lost income is gathering comprehensive financial records. Atlantic Adjusting Co. Inc. recommends compiling:

Profit and loss statements
Tax returns
Bank statements
Payroll records
Sales reports

These documents establish a clear baseline for your income and help quantify the financial impact of the interruption. Accuracy in this stage is essential to ensure your claim reflects the true scope of your losses.

Step 2: Determine the Period of Interruption

Identify the exact period during which your business was affected. This period typically starts from the date of the covered event and ends when your operations return to normal. Keep detailed records of downtime, including partial closures, reduced sales, and ongoing expenses.

Accurately defining the interruption period is key for calculating your claim. Atlantic Adjusting Co. Inc. works closely with clients to document these dates and create a precise timeline of losses.

Step 3: Calculate Lost Revenue

Lost revenue is the difference between the income your business would have earned and the actual income during the interruption period. To calculate this:

Determine average income for a comparable period before the interruption (monthly, quarterly, or yearly).
Subtract the actual income earned during the interruption period.
Adjust for any seasonal fluctuations or trends that would have affected normal revenue.

This step provides the foundation for your claim and demonstrates the financial impact of the interruption.

Step 4: Include Ongoing and Extra Expenses

Even during an interruption, many businesses continue to incur operating costs. These may include:

Rent or mortgage payments
Utility bills
Employee salaries
Loan repayments

Additionally, extra expenses incurred to minimize losses—such as temporary relocation, equipment rental, or expedited shipping—should be documented and included in your claim. Atlantic Adjusting Co. Inc. ensures that all eligible costs are accounted for, maximizing your compensation.

Step 5: Consult With a Business Interruption Expert

Calculating lost income can be complex, especially for businesses with fluctuating revenue or multiple locations. Partnering with experienced professionals, like Atlantic Adjusting Co. Inc., can help ensure your claim is accurate and comprehensive. Our experts analyze your financial data, verify all eligible losses, and assist in presenting a compelling case to your insurance company.

Step 6: Prepare Documentation for Your Claim

Insurance companies require detailed documentation to support business interruption claims. This includes:

Detailed calculations of lost income and expenses
Supporting financial records
Notes on operational disruptions
Receipts for additional expenditures

Proper documentation strengthens your claim and increases the likelihood of receiving full compensation. Atlantic Adjusting Co. Inc. provides guidance and support to help you compile a thorough and professional submission.

Conclusion

Filing a business interruption claim can be overwhelming, but accurate calculation of lost income is critical to protecting your business’s financial health. By gathering financial records, defining the interruption period, calculating lost revenue, accounting for ongoing expenses, and consulting experts, you can maximize your claim.

Atlantic Adjusting Co. Inc. is committed to assisting businesses through every step of this process. Our expertise ensures that clients recover the income and resources needed to resume normal operations quickly.

For assistance with your business interruption claim, contact us at (888) 516-ADJUST or visit https://atlanticadjustingcompany.com/.