Business Interruption Insurance
Information Requirements

Relatively few insurance professionals and/or accountants are involved with business interruption insurance claims on a regular basis. Depending upon the size and complexity of the loss, the insurance adjuster and/or the insured often engage the services of a professional accountant who is both knowledgeable and experienced in the field. However, it is important that all parties involved in preparing, calculating, presenting, adjusting and settling a business interruption insurance claim have a good understanding of a loss calculation.

A. Claim Calculation Format

There are no standard formats which can be used when submitting a business interruption insurance claim to insurance companies. As each business interruption claim is unique to the loss circumstances and specific to the coverage wording, various formats are acceptable. However, two overriding principles should prevail:

B. Minimum Information Required

Although each business interruption claim has unique components, there is a typical body of information which should be requested on almost all business interruption insurance claims. It should include the following:

1. Full details of the nature and circumstances of the loss including all particulars on other claims (i.e. stock, physical damage) resulting from the incident.

2. A complete copy of the insurance policy(s) in force.

3. Any preliminary calculations of the business interruption loss.

4. Details of any previous losses and/or insurance claims.

5. The estimated or agreed period of repair, interruption and/or indemnity.

6. The financial statements of the business for the two years prior to the loss, during the affected period and for any periods available after the loss affected period. For larger entities, monthly income statements for the same periods are required.

7. Separate analyses of the insured’s sales and production if applicable, by month and by department for the two or three years prior to the loss date.

8. Any business plans including sales and/or production projections, existing prior and subsequent to the loss date.

9. Details of the operating and financial results for other insured locations.

10. Inventory levels by month for the previous two years and for all months available after the date of loss.

11. Details of the labour force as to which employees are key, ordinary and retained after the loss.

This listing should be regarded as a guideline only of the minimum information required. Clearly, more specific information requests would be tailored to the individual claim and business circumstances. That is where we at Paterson • Jamieson • Associates can assist with the claim preparation.

Although we are based in Vancouver, Canada, we travel throughout North America in our role as specialized business interruption insurance accountants. We can be reached at 604-688-9100 to review your problem or complete the following inquiry form and one of us will call you back.