Hurricanes Milton and Helene Underscore Importance of Interruption Insurance
Many dentists have experienced prolonged shutdowns due to Hurricanes Helene and Milton. With operations shut down, dentists need to turn to their insurance coverage, specifically their business interruption coverage. This coverage will be part of the dentist’s business owner’s policy (BOP). Every impacted dentist should immediately get ahold of their policy documents, either through their online portal or by contacting their business insurance broker. Many policies require that the policyholder give notice immediately upon experiencing an insurable event, making this a priority.
What Is Covered Under Business Interruption Coverage?
Every policy will have a different definition of what a qualifying event is, but, generally, the business will have to have suffered physical damage to qualify for business interruption coverage. However, some policies may include additional coverages that can help to recover losses.1 If you have not experienced physical damage but have experienced business losses, be sure to check for the following coverages in your policy:
Contingent business interruption insurance: Covers businesses without property damage that experience disruptions due to supply chain issues, including the ability to acquire goods or services or deliver goods or services to customers.
Service interruption coverage: Covers losses and/or expenses caused by interruption of your utility services. This is a key coverage for dentists to check for, as many places in the Southeast took weeks to restore coverage, and many parts of western North Carolina are still without power.
Civil authority coverage: Covers damages due to government orders restricting access to a business or closing key transportation such as roadways. This is another key coverage to check for, since many roads were washed away after Hurricane Helene.
Ingress/egress coverage: Covers income and/or expenses due to customers’ inability to travel to your business. This coverage is similar to civil authority coverage except it doesn’t require a civil order. Depending on policy language, this coverage can require actual physical damage, but not always.2
Unfortunately, some dentists will discover that while their business was impacted, the cause did not trigger any policy coverages, leaving them on the hook for the damages. However, dentists should carefully read their policies and contact a reputable attorney if they aren’t certain, rather than listening to the claims adjuster.
Tips for Filing a Claim
One of the most important steps is to immediately file notice of insurance claims with your insurance carrier, even if you aren’t certain of your claim or cannot locate your documents,3 since many carriers require claims to be made within a certain period of time following any losses. The next step is to begin documenting all damages. For actual physical damage, be certain to take photographs of all damage, including damage to entryways or roadways leading into your practice. Photos should be taken prior to cleanup crews arriving on scene if possible.
Next, you’ll want to itemize all lost or damaged property. As soon as reasonably practicable, you’ll want to collect quotes to replace or repair all lost or damaged property. Be sure to not only document replacement costs, but also document the process and steps taken to repair the damage and return to normal, since policy language can dictate that coverage is only in place for a reasonable period of time to repair damage.
Lastly, you’ll need to collect financial documents showing the impact to your business. Most policies will not cover you for “growth,” but many will cover for lost revenues. Include profit and loss statements for the applicable period of shutdown. Dentists will also want to show the same period for the prior year. Furthermore, the dentist will need to provide documentation of the insurable event. This can be easy for property damage, but for other claims be certain you have supporting evidence of the cause of your claim. This could include notifications from utility companies, videos of the utilities not working, pictures of the road with damage, etc.
Be sure to work with your broker to file a claim and potentially an attorney, depending on the level of damage. While your property coverage will probably include windstorm coverage, your business owner’s policy excludes natural disasters, unless you have included this as a separate rider. However, there are policy provisions that could provide relief.3 Lastly, Federal Emergency Management Agency (FEMA) funds are available as a last resort only under the Stafford Act. This means that if your business has significant damage that could qualify for FEMA support, an insurance claim may be required to receive that support, even if rejected.
Wesley W. Lyon II, CPA, CFP, is President & CEO of McGill and Lyon Dental Advisors. He is the AGD Impact Financial Management columnist. For more information on his firm’s comprehensive tax and business planning services for dentists and specialists, contact Danielle Fitzgerald at 877.306.9780, or email consulting@mcgillhillgroup.com.
Learn more about insurance options through AGD's partner Hagan Insurance.
References
1. Bein, Alexander, et al. “Tips to Maximize Insurance Recoveries for Hurricane Helene Property Damage and Business Interruption Losses.” Pro Policyholder, 30 Sept. 2024, propolicyholder.com/2024/09/tips-to-maximize-insurance-recoveries-for-hurricane-helene-property-damage-and-business-interruption-losses/.
2. Krekstein, William, and Matthew Malamud. “Loss of Ingress or Egress: Is There Coverage for Denial of Access to an Insured Location?” The Law Offices of Howard K. Ross, hkr.law/wp-content/uploads/2021/06/Loss-of-Ingress-or-Egress-Additional-Coverage-for-Denial-of-Access-to-an-Insured-Location-website.pdf.
3. Covington, Alec, et al. “Tips for Pursuing Insurance Claims and Disaster Relief Funding in North Carolina after Hurricane Helene.” Pro Policyholder, 3 Oct. 2024, propolicyholder.com/2024/10/tips-for-pursuing-insurance-claims-and-disaster-relief-funding-in-north-carolina-after-hurricane-helene/.
What Is Covered Under Business Interruption Coverage?
Every policy will have a different definition of what a qualifying event is, but, generally, the business will have to have suffered physical damage to qualify for business interruption coverage. However, some policies may include additional coverages that can help to recover losses.1 If you have not experienced physical damage but have experienced business losses, be sure to check for the following coverages in your policy:
Contingent business interruption insurance: Covers businesses without property damage that experience disruptions due to supply chain issues, including the ability to acquire goods or services or deliver goods or services to customers.
Service interruption coverage: Covers losses and/or expenses caused by interruption of your utility services. This is a key coverage for dentists to check for, as many places in the Southeast took weeks to restore coverage, and many parts of western North Carolina are still without power.
Civil authority coverage: Covers damages due to government orders restricting access to a business or closing key transportation such as roadways. This is another key coverage to check for, since many roads were washed away after Hurricane Helene.
Ingress/egress coverage: Covers income and/or expenses due to customers’ inability to travel to your business. This coverage is similar to civil authority coverage except it doesn’t require a civil order. Depending on policy language, this coverage can require actual physical damage, but not always.2
Unfortunately, some dentists will discover that while their business was impacted, the cause did not trigger any policy coverages, leaving them on the hook for the damages. However, dentists should carefully read their policies and contact a reputable attorney if they aren’t certain, rather than listening to the claims adjuster.
Tips for Filing a Claim
One of the most important steps is to immediately file notice of insurance claims with your insurance carrier, even if you aren’t certain of your claim or cannot locate your documents,3 since many carriers require claims to be made within a certain period of time following any losses. The next step is to begin documenting all damages. For actual physical damage, be certain to take photographs of all damage, including damage to entryways or roadways leading into your practice. Photos should be taken prior to cleanup crews arriving on scene if possible.
Next, you’ll want to itemize all lost or damaged property. As soon as reasonably practicable, you’ll want to collect quotes to replace or repair all lost or damaged property. Be sure to not only document replacement costs, but also document the process and steps taken to repair the damage and return to normal, since policy language can dictate that coverage is only in place for a reasonable period of time to repair damage.
Lastly, you’ll need to collect financial documents showing the impact to your business. Most policies will not cover you for “growth,” but many will cover for lost revenues. Include profit and loss statements for the applicable period of shutdown. Dentists will also want to show the same period for the prior year. Furthermore, the dentist will need to provide documentation of the insurable event. This can be easy for property damage, but for other claims be certain you have supporting evidence of the cause of your claim. This could include notifications from utility companies, videos of the utilities not working, pictures of the road with damage, etc.
Be sure to work with your broker to file a claim and potentially an attorney, depending on the level of damage. While your property coverage will probably include windstorm coverage, your business owner’s policy excludes natural disasters, unless you have included this as a separate rider. However, there are policy provisions that could provide relief.3 Lastly, Federal Emergency Management Agency (FEMA) funds are available as a last resort only under the Stafford Act. This means that if your business has significant damage that could qualify for FEMA support, an insurance claim may be required to receive that support, even if rejected.
Wesley W. Lyon II, CPA, CFP, is President & CEO of McGill and Lyon Dental Advisors. He is the AGD Impact Financial Management columnist. For more information on his firm’s comprehensive tax and business planning services for dentists and specialists, contact Danielle Fitzgerald at 877.306.9780, or email consulting@mcgillhillgroup.com.
Learn more about insurance options through AGD's partner Hagan Insurance.
References
1. Bein, Alexander, et al. “Tips to Maximize Insurance Recoveries for Hurricane Helene Property Damage and Business Interruption Losses.” Pro Policyholder, 30 Sept. 2024, propolicyholder.com/2024/09/tips-to-maximize-insurance-recoveries-for-hurricane-helene-property-damage-and-business-interruption-losses/.
2. Krekstein, William, and Matthew Malamud. “Loss of Ingress or Egress: Is There Coverage for Denial of Access to an Insured Location?” The Law Offices of Howard K. Ross, hkr.law/wp-content/uploads/2021/06/Loss-of-Ingress-or-Egress-Additional-Coverage-for-Denial-of-Access-to-an-Insured-Location-website.pdf.
3. Covington, Alec, et al. “Tips for Pursuing Insurance Claims and Disaster Relief Funding in North Carolina after Hurricane Helene.” Pro Policyholder, 3 Oct. 2024, propolicyholder.com/2024/10/tips-for-pursuing-insurance-claims-and-disaster-relief-funding-in-north-carolina-after-hurricane-helene/.