Over the past number of months, Business interruption cover is a topic on everyone’s lips. We have been asked “how do I submit a claim for Business interruption?” and “What documents do I need to provide to have a valid claim?”.
It has become evident that delays in business interruption claims being finalised, have been caused by the lack of first time information being provided on the submission of Business Interruption claims.
This has caused Insurers/loss adjusters to call for further information resulting in frustration on the part of both brokers and clients.
Please see below a generic list of requirements that should be obtained in order to enable a speedy resolution to BI claims (this is a generic list and can will adjusted for a client’s specific circumstances):
- The Audited Annual Financial Statements, including the detailed Income Statement, in respect of the past 3 financial years (smaller businesses may not be required to have audited financial statements).
- The year-to-date detailed Income Statement for the current financial year.
- Monthly management accounts (i.e. on a monthly basis) for the prior three financial years, and for the current financial year to date. The monthly management accounts will be required for the current months, as they become available (3 years’ figures are the best way to determine the trend to be applied for the indemnity period, this is most often a point of dispute, hence 3 years is a good sample of historical figures to trend forward).
- Current and prior year budgets if not included in the management accounts.
- Forecasts prior and current. Prior forecast assists in testing the accuracy of the current forecast.
- VAT 201 returns in respect of the last tax year as well as for the current Financial year to date. The VAT returns will be required for the current months, as they become available.
- Copy of the current lease agreement, where applicable (required to establish if there is a Turnover Rent clause in place and whether or not the Insured may be entitled to any reductions such as rental savings/variances etc).
- Confirmation and substantiation in respect of the retention of staff; and if retained, remuneration agreements; enforced leave; unpaid leave etc; Application and receipt of any Government assistance (TERS / UIF etc.); Any Government financial relief in addition to b) above; Confirmation of any rental abatement/relief; Interruption period (start to end dates).
- Details and substantiation of any steps taken to mitigate the Business Interruption loss.
Although this list is generic, we believe it is vital for all business/commercial policy holders to have sufficient evidence to substantiate a claim.
Business interruption claims are technical and admin intensive, however good house keeping within your business, is key to a claim not only being paid, but also assists in fast tracking the claims process and allows us as your broker to ensure your claims experience is a good one.
For more information regarding your own insurance policy, please do not hesitate to contact our offices or your broker personally to discuss and explain your cover in more detail.
Disclaimer: The advice contained in this article is for general purposes only and does not consider individual circumstances, objectives, or financial needs. Accordingly, readers are advised to seek appropriate advice from licensed professionals prior to taking up a financial product or service or amending any current policy.