The stoplights have been repaired and the debris has been cleared, but many local businesses are still feeling the effects of Hurricane Irma, especially in the hospitality industry, due to continued rebuilding efforts, the public perception that South Florida is not ready for visitors again and the loss of other tourist attractions that draw visitors to South Florida. The adverse effects may also be felt years to come, when visitors decide against scheduling a wedding or other event during the summer months in South Florida. While these losses are difficult to quantify and can only be insured through a defined time period, businesses should ensure they maximize insurance coverage for this lost income.

“Business interruption” or “loss of business” coverage pays for lost income and profits following a suspension of operations caused by physical damage, such as a hurricane. This coverage applies to the time period immediately after the physical event occurs and ends when the business resumes operations, either after repair or relocation to another location. Further, there is typically a waiting period of 72 hours after physical damage occurs before the loss of income will be covered. Thus, if a business reopens a week after a hurricane hits, it may only receive coverage for loss of profits during that short time period even though it suffers lost profits for months after reopening. For this reason, it is recommended that businesses negotiate with their insurance carriers to reduce the 72-hour waiting period, and additionally consider securing an “extended period of indemnity,” which would cover loss of income for a specified period of time after the business resumes operations, such as 30, 60 or 90 days after reopening, when business losses often continue due to the loss of customers.

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