Business Income Insurance Expert Witness
All businesses face exposure to Business Income (f/k/a Business Interruption) (“BI”) losses caused by physical damage to its facilities (e.g., fire, windstorm, collapse). BI coverage provides money to replace Net Income, and Continuing normal operating expenses, including payroll (e.g., profits, loan payments, payroll) during the period of restoration. For property owners/lessors coverage is typically referred to as Rents insurance. Optional Extra Expense (“EE”) coverage is intended to pay for extra expenses incurred during the period of restoration to minimize the suspension of operations (e.g., relocation, overtime, expedited freight).
Business Income is also known as Time Element and/or consequential loss coverage in the sense that it covers the time period when operations are interrupted as a consequence of physical damage (e.g., fire, windstorm, collapse) to a business’ facilities. Because BI/EE coverage is based on “forward looking” financial projections/estimates, claim settlement can be complicated. Absent the physical damage, what would the Profit and Loss statement have shown? What is a reasonable period of restoration? How did extra expenses incurred minimize the suspension of operations?
Business Income and Extra Expense insurance policy forms and endorsements are available to insure losses resulting from:
- Physical Damage to buildings/contents
- Loss of Rents
- Off-premises utilities
- Dependent properties
- Extended Period of Indemnity
- Equipment breakdown / Food Contamination
- Builders Risk soft costs
Customized BI/EE policy forms are usually required to cover losses from Electronic media (Computers), International operations, Food Borne Illness, Dependent properties, and Seasonal variation.
We can help with your insurance expert witness search. Call (817) 980-4897 to discuss your case.
Business Income and Extra Expense coverage can be added by endorsement or written separately because it is typically excluded in Commercial Property Insurance policies. Coverage issues include:
- Calculating accurate/adequate BI/EE limits of insurance.
- Completing a Business Income Worksheet?
- Where does money come from for continuing expenses when business is suspended due to a fire or tornado?
- How long will the business survive if income is reduced by 25%-50%-100%?
- How long can we survive a loss of Business Income before closing the doors?
- How do we establish the length of time for Extended Period of Indemnity coverage?
- What ‘Extra Expenses’ could we incur? How will we pay for those?
- Do we have Selling Price coverage for any of our inventory?
Call (817) 980-4897 to discuss your case.
A $25,000 fire loss can result in a disastrous $500,000 BI/EE claim. Without adequate “BI/EE” insurance limits most businesses cannot survive any extended loss of Business Income.
Resolving BI/EE claims efficiently depends on:
- Properly structured BI/EE coverage forms and adequate limits of insurance.
- Carriers are obligated to investigate and attempt settlement of the claim in reasonable fashion.
- Policyholders are obligated to make efforts to resume operations as soon as soon as practical.
Numerous insurance industry and customer documents are used to substantiate the claim, establish the amount of loss, and/or facilitate settlement:
- Historic pre-loss rent rolls
- Pre-loss accounting data as a template for post-loss expenses.
- BI/EE accountant experts familiar with technical BI/EE issues (retained by policyholder and/or carrier).
- Good faith carrier-policyholder negotiations for variable cost items.
Mr. Daniel offers wide experience with BI/EE insurance from advising clients on initial coverage design through final claim settlement. As a Business Income Insurance expert witness he has been retained on dozens of cases, as well as serving as policyholder’s BI/EE claims representative.
Mr. Daniel’s experience with Business Income and Extra Expense spans 48 years, including nearly 2 decades as an insurance expert witness. Representative client industries:
- Retailers / Wholesalers
- Property owners
- Importers / Exporters.
He is frequently engaged as a Business Income/Extra Expense insurance expert witness (see “Cases”) to provide analysis and opinions on various BI/EE coverage and claims issues:
- Manufacturer’s Selling Price valuation
- Loss of Rents
- Agreed Value
- Off-Premises Utilities
- Extended Period of Indemnity
- Dependent Properties
- Ordinance or Law
- Computers / Electronic Equipment / Media
- Builder's Risk “soft costs”
- Inland Marine / Ocean Marine
- Boiler & Machinery / Equipment Breakdown
- Coinsurance / Agreed Value
- Business Owners policies
- Business Income Worksheets