A business interruption claim can be the difference between recovering from a covered loss and closing for good. Callahan & Blaine, PC represents Orange County businesses whose interruption claims have been denied or underpaid, as part of our insurance litigation practice. We hold carriers to the coverage that protects your income.
What Business Interruption Insurance Covers in Orange County
Business interruption coverage, often part of a commercial property policy, is designed to replace income a business loses when a covered event suspends its operations. Coverage usually depends on direct physical loss to the property, a defined period of restoration, and the specific terms of the policy. Carriers frequently dispute whether a physical loss occurred, how long the restoration period runs, and how much income was actually lost.
Losses a Business Interruption Policy May Cover
Depending on the policy, a business interruption claim may include the following.
- Lost net business income during the period of restoration
- Continuing operating expenses such as rent and utilities
- Employee payroll
- Temporary relocation costs
- Extra expense incurred to resume operations
- Civil authority losses when a government order limits access to your premises
The exact coverage depends on the policy language, which is why a close reading of your policy matters.
Why Business Interruption Claims Get Denied
No Direct Physical Loss
Arguing the interruption did not follow direct physical loss or damage to the property.
Exclusion Disputes
Applying exclusions to avoid coverage for the cause of the interruption.
Restoration Period Disputes
Cutting the period of restoration short to reduce the income owed.
Income Undervaluation
Understating lost income by disputing financial records or projections.
Proving a Business Interruption Claim
A strong claim rests on clear proof of the loss. Businesses should preserve profit and loss statements, tax returns, payroll records, and documentation of the covered event and its effect on operations. Deadlines and notice requirements in commercial policies are often strict, so it is important to act quickly. Our attorneys assemble the financial record, retain the right professionals where needed, and press the carrier to pay the full amount owed.
Meet Edward Susolik
Edward Susolik
Chair, Insurance Law Department, Callahan & Blaine, PC
Edward Susolik leads the firm’s insurance practice and has represented businesses in coverage and bad faith disputes for decades. He teaches insurance law at the University of Southern California Gould School of Law and edits a widely cited California insurance litigation treatise. He has been recognized among the Super Lawyers Top 100 attorneys in Southern California.
Why Businesses Choose Callahan & Blaine, PC
Since 1984, Callahan & Blaine, PC has represented companies of every size in insurance and complex business litigation. We understand how carriers evaluate interruption losses, and we build the financial and legal case needed to recover the income your policy owes. The California Department of Insurance explains that coverage depends on the perils named in the policy, and we hold carriers to what they agreed to insure.
Speak With an Orange County Business Interruption Attorney
If your business interruption claim was denied or underpaid, Callahan & Blaine, PC can review your policy and pursue the income you are owed.
Frequently Asked Questions
Does business interruption insurance require physical damage to pay out?
Most policies require direct physical loss or damage to the covered property to trigger business interruption coverage, though the exact requirement depends on the policy language.
What is civil authority coverage?
Civil authority coverage can pay for lost income when a government order limits access to your premises because of a nearby covered loss, subject to the policy’s terms and time limits.
What is the period of restoration?
The period of restoration is the window during which the policy pays lost income, generally from the date of loss until the property is or reasonably should be repaired. Carriers often dispute its length.
Does business interruption insurance cover wildfire or smoke losses?
It may, when a covered fire or smoke event causes direct physical loss that suspends operations. Coverage depends on the perils named in the policy and any applicable exclusions.
What records do I need to prove a business interruption claim?
Useful records include profit and loss statements, tax returns, payroll records, and documentation of the covered event and its effect on your operations.
What can I do if my business interruption claim is denied or underpaid?
You may challenge the decision, and an unreasonable denial or underpayment can support a bad faith claim in addition to the benefits owed under the policy.
