Strong documentation is especially important in business interruption claims, since these losses are based on financial records and projections rather than straightforward physical repair costs alone.
Historical financial statements, including profit and loss statements from prior years, help establish a baseline for what the business would likely have earned without the interruption.
Tax returns and payroll records can provide additional support for income and expense figures, helping corroborate the numbers presented in financial statements.
Records of continuing expenses during the interruption period, along with any extra expenses incurred to reduce the impact of the loss, should be documented with receipts and clear explanations of their purpose.
A clear timeline of the interruption itself, including when operations stopped, when they resumed, and any factors that affected how long the interruption lasted, helps support the period of restoration used in the calculation.
Gathering this documentation early and keeping it well organized can make a significant difference in how efficiently a business interruption appraisal proceeds.
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.