Broker Check

Business Interruption Complications: Riots, COVID-19, PPP

June 12, 2020

In the best of circumstances, adjusting business interruption losses is complicated because they require calculation of what a business would have earned had no loss occurred.

The riots growing out of protests over George Floyd's death, coming at a time when businesses are just reopening or preparing to reopen after the COVID-19 pandemic, make loss adjustment more difficult. Direct loss from riot is covered and should be adjusted fairly easily. Business interruption on the other hand is a judgment call - how much lost business is due to riot damage, and how much to COVID-19 closure which is usually not covered?

To complicate things further, if a business received a loan from the federal Paycheck Protection Program (PPP) will that be considered revenue or as relieving business loss?

If your business suffered riot damage, submit  a claim including business interruption. Be prepared to document everything and expect a long drawn out settlement. Ask your insurance adviser and accountant for assistance.