Business interruption claims can be complex, and a few common mistakes can make the process more difficult or reduce the strength of a business’s position if the claim ends up in appraisal.
One common mistake is not maintaining thorough financial records before a loss occurs, which can make it harder to establish a reliable baseline for what the business would have earned without the interruption.
Failing to document extra expenses clearly, including receipts and explanations of how each expense related to reducing the interruption, can also weaken a claim if those costs later become disputed.
Underestimating the importance of a clear timeline can be another issue, since gaps or inconsistencies in documenting when operations stopped and resumed can create confusion during the appraisal process.
Waiting too long to involve financial professionals, such as an accountant familiar with business interruption calculations, can also put a business at a disadvantage if the claim becomes complex or contested.
Being proactive about documentation and seeking appropriate professional help early can help a business avoid these common pitfalls if a dispute later requires appraisal.
This article is general education about how the appraisal process commonly works. It is not legal advice, and specific procedures can vary by state and policy. If you have questions about your own claim, review your policy language and talk with your insurance company, agent, or an attorney familiar with your state’s laws.
Russ Lis is a working property insurance appraiser and umpire based in Minnesota, serving clients nationwide. Have a question about your own claim? Contact Appraisal Resolution.