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Business Income claim - market conditions

Updated: Feb 8

It's been the subject many times follow a catastrophe - ex. a store that has barely been holding on is spared by a localized catastrophe... sales skyrocket when responders and contractors rush the area for months following the disaster... if the store suffered a fire a few weeks into the town's reconstruction, should the improved revenue be considered in its business interruption claim? Insurers and their adjusters may not see eye-to-eye with the policyholder and seek to prevent a perceived 'windfall' to the policyholder.


Moving forward... should an insurer consider the slowdown when calculating business interruption claims during COVID. A Chicago, Illinois claim is going to shed some light.


Here, the situation involves a Chicago hotel that was forced to close its lobby following riots which caused damage to the hotel. It's been reported that the hotel's insurance carrier has indeed discounted their business income claim as a consequence of COVID slowdowns, having paid approximately 10% of the claimed value. It is important to note that the Illinois insurance department issued a bulletin asking insurers to adjust losses without consideration to COVID-19 as a factor.


Another blow to the businesses that are already in crisis... and perhaps now a perceived windfall to the insurer. Done in the face of a state bulletin to the contrary.


The adjustment concepts are Economy Considered v Economy Ignored.





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