Business Interruption Claims — Enhancing Insurance Coverage

Event Detail
  • May 05, 2020
  • 2 – 2:30 p.m. CT
  • Location
  • Virtual
  • Hosting
Business Discussion Cube Bay of Windows

Join our CLA professionals and guests as we share strategies to help enhance your insurance coverage and discuss what to think about when considering a business interruption claim. 


  • Leslie Boyd, Principal, CLA
  • Todd Schreck, Senior Vice President, Strategic Growth Leader, Hylant
  • Barbara Gottlieb, Principal, CLA
  • Joe Wieligman, Vice President, Strategic Operations, Hylant

In case you missed it: 

Questions and Answers:

Is insurance higher for vacant buildings than those that are occupied?

It depends, but generally a vacant property represents a higher risk to an insurer than an occupied building and the carrier will price the exposure accordingly. As a result of COVID-19, many carriers are making accommodations on first-party commercial property policies by removing certain vacancy provisions which usually precludes coverage for certain perils when the property has been vacant for a specified period of time as set forth in the policy.

Does COVID-19 trigger coverage as any other natural disaster?

A natural disaster is not an autonomic coverage trigger and therefore specific policy language needs to be reviewed to determine if coverage applies.

If you receive a PPP loan, does this impact your ability to seek insurance coverage relief?

No. You can always file an insurance claim. However, your claim may be subject to policy terms and conditions.

Do all business interruption (BI) policies only trigger for property loss or are there other BI policies that can kick in for loss of revenue without property damage?

We recommend you reach out to your CLA advisors to further discuss further.

We have a virus exclusion. Is it worth tracking COVID-related expenses in a new account?

We recommend you reach out to your CLA advisors to discuss further.

What do we need to do if we received our full Paycheck Protection Program (PPP) amount, as well as an Economic Injury Disaster Loan (EIDL)?

Begin tracking your expenses for forgiveness purposes. Segregating PPP funds in a separate bank account is the best way to track spending. Keep in mind EIDL loans are not subject to forgiveness, so you have to back it out of your spend for PPP purpose.

We have a credit line with excess capacity available.Does this require us to pay back the PPP loan we received by the May 7 deadline?

Please consult with your attorney.

Was there some clarification that came out yesterday regarding the definition of "necessary" with respect to the certification of the PPP Applicants?

We are not aware of new guidance related to that definition at this time’ includes the same sentiment without unnecessary wordiness.

What we talked about:

Boyd: Good afternoon to our CLA Family, clients, community partners, and friends. Welcome back to our 13th livestream where we are going to talk about business insurance considerations in light of COVID-19. We are grateful to have you and, as always, your health and safety are our top priorities.

We are thrilled today to have Hylant join CLA for an interactive discussion regarding insurance considerations in the midst of COVID-19. I would like to welcome Barbara Gottlieb from CLA’s Valuation and Forensic team, and Todd Schreck and Joe Wieligman from Hylant.

Today we’ll cover four different areas (timestamps of topic discussions included in parentheses):

  • State of the insurance marketplace and claims (3:45 – 9:40)
  • Insurance framework – how to read a policy in light of the COVID-19 pandemic (9:45 – 16:25)
  • Impacts on cash flow from an insurance perspective (16:36 – 23:04)
  • Building an event file (23:10 – 29:20)

Discussion outline:

Shreck: Insurance contracts, like any other contract, need to be thoroughly reviewed by legal counsel and insurance consultants. COVID-19 has brought light to the importance of this legal contract.

  • State of the insurance marketplace and claims
    • Background on pandemics and how this exposure intersects with the insurance industry, including SARS
    • Fluid environment which is being influenced by special interests; we don’t know where this will end up
    • What Hylant is seeing as far as claims are concerned
    • How Hylant is approaching the claims conversation with clients

Wieligman: Insurance framework – how to read a policy in light of COVID-19

  • Debunking “all risk” policy language from a historical perspective 
  • How exclusions work on a policy
  • Why exclusions are usually included in an insurance contract, and the connection to the SARS outbreak and virus exclusions which are now on various policies.
  • Lines to consider
    • General liability
    • Property
      • Business Interruption (BI)
        • Civil authority
        • Contingent BI
    • Workers compensation
    • Executive risk

Schreck and Wieligman: Impacting cash flow from an insurance perspective

  • What our team is doing to positively impact our clients’ cash flows during COVID-19, and how we are approaching their renewals
    • Adjusting coverages to new operating levels

Gottlieb: Building an event file for a potential claim

  • Establish general ledger account for COVID-19 impact 
  • How CLA is helping their clients calculate the financial impact of COVID-19 on their businesses
    • Measurement of loss – understanding all components
    • Damage calculations – a forensic accountant can assist in maximizing recovery on a covered loss – as the calculations can be nuanced and might include expenses and loss of revenue you might not consider without assistance.
      • Historical operating results
        • Financial statements 
        • Tax returns
        • General ledgers
        • Subsidiary ledgers
      • Projections and forecasts
      • Extra expenses

Your specific policy will govern whether your insurance company will reimburse expenses, if there is a covered loss.

For more information:
Heather Kloster
Marketing Project Management Director

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