Business interruption insurance, sometimes called business income coverage, generally helps replace lost income and cover certain ongoing expenses when a covered property loss forces a business to suspend or reduce operations. When the dollar value of this type of claim is disputed, appraisal can apply here as well.
Because business interruption losses involve financial calculations rather than physical repair costs, evaluating them typically requires reviewing income records, operating expenses, and how long the interruption is expected to last, in addition to any physical damage involved.
The appraisal clause in many commercial property policies applies to business interruption losses the same way it applies to physical property damage, meaning a disagreement over the dollar amount of the lost income or extra expense claim can be resolved through the same appraisal process.
Appraisers handling business interruption claims often need financial analysis skills in addition to construction and estimating knowledge, since these claims combine questions about the physical loss with questions about its financial impact on the business.
As with any appraisal, the process focuses on resolving the disputed dollar amount, relying on detailed financial documentation and analysis to reach a fair, well supported figure.
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.