Commercial property insurance policies may cover business interruption losses during the period of time that a business is interrupted by a covered peril, such as flooding. Commercial property insurance policies all differ, so a review of the policy is required to determine what perils and losses are covered.

When disasters such as the recent flooding occur, the need for a certified public accountant and other professionals can arise to assist organizations in navigating the adjustment process after a loss. Such professionals can review policies to determine what losses may be covered and specifically address business interruption as well as mitigate losses and quantify and document claims.

Business Interruption Insurance typically covers income that is lost and expenses that are incurred while operations are suspended, including:

• income that would have been earned;

• expenses still being incurred by the business that are ordinary and necessary;

• relocation expense to move and operate from a temporary location may be covered;

• and, depending on the policy, other reimbursable expenses.

Business Interruption Insurance policies are complex, including calculating the actual loss itself as well as the length of the business interruption period. In calculating the business interruption period, four well-set rules generally apply:

• When the property is not repaired, the losses are calculated based on a theoretical calculation of business income.

• When the property is repaired, the starting point for the loss period is the period of time it took to restore the operations of the business.

• When the insurer causes delays, the loss period can be lengthened.

• When a third party, such as a contractor, causes delays, the risk of loss would generally be allocated to the party causing the delay.

A tremendous amount of work goes into filing a successful claim, particularly as it relates to financial projections for lost profits. Consultation with an experienced professional can help ensure a successful claim.

Brian Zales is a CPA, chartered global management accountant, accredited in business valuation and a certified fraud examiner. He is a director in the consulting practice at Anton Collins Mitchell LLP. Zales can be reached at 303-830-1120, bzales@acmllp.com or www.acmllp.com/Brian-Zales.html.

Need help?

If you’ve been impacted by the Front Range floods, these organizations can provide assistance.

National Flood Insurance Program
Customer service: 1-800-427-4661
Existing policies: 1-800-638-6620

Colorado Division of Banking and Insurance
Consumer information: 1-303-894-7490
Toll-free outside Denver: 1-800-930-3745
Complaints: 1-303-894-7499

U.S. Department of Veterans Affairs
1-800-827-1000
TTY 1-800-829-4833
Online at www.va.gov

Better Business Bureau serving Northern Colorado and Wyoming
1-800-564-0371
http://wynco.bbb.org/

Consumer Credit Counseling Service
Call 211 for the nearest location.

If you sustained loss or damage and live in Larimer, Weld, Boulder or Adams counties, you should immediately register for disaster assistance by calling 1-800-621-FEMA (3362) or by visiting DisasterAssistance.gov.

For small businesses affected by the flooding, register your claim with the Small Business Administration at www.sba.gov.

For a list of housing resources available from the U.S. Department of Housing and Urban Development, visit www.hud.gov.

For farmers seeking assistance, visit the Farm Service Agency’s Disaster Assistance Programs resource page at www.fsa.usda.gov.

For a comprehensive overview of what to do before, during and after a flood, visit the Federal Emergency Management Agency’s flood resource page at www.ready.gov/floods.