Extra Expense Claims
When businesses suffer losses to their properties, there are times when they may incur extra expenses that would not have been incurred but for the losses. Consequently, it is important for businesses to have extra expense coverage. This type of coverage can be crucial during the financially challenging period after a loss occurs.
It is important to review your policy as there may be several technicalities associated with extra expense coverage. For example, extra expense coverage generally only applies if there is a direct physical loss to the property and a business incurs expenses due to the loss. Such policies generally contain limitations, including the amount of time within which extra expense coverage will be paid and a limitation on the amount of such coverage.
Insurers may attempt to limit the amount of extra expense coverage that is paid. They may claim that certain expenses do not qualify for such coverage or that they were not necessary. Additionally, insurance companies may try to claim that the insured failed to promptly repair the property and as a result, the extra expense coverage should not be paid to the insured. In any event, these issues can be complex so it is best to involve a knowledgeable attorney.
Things to Do After Your Property Sustains Damage that is Covered Under a Commercial Property Insurance Policy and Your Business Incurs Extra Expenses Due to the Loss
- Review your insurance policy. Almost every commercial property insurance policy has a section outlining the business owner’s obligations.
- Promptly report the loss to the insurance company.
- Record the damage by photographs or video.
- Protect your property from further loss or damage.
- Show the insurance company the damaged property, and otherwise allow it to inspect the loss.
- Keep accurate records of expenditures for repairs to the damaged property (and provide them to the insurance company upon request), and any extra expenses the business incurs that it would not have incurred but for the loss.
- Provide a “sworn proof of loss” (a form outlining the amount you are claiming for the damage to your property) to the insurer as required by the policy.
- Give statements (sometimes called examinations under oath or “EUO’S”) to the insurance company regarding the loss as required by the policy.
- Consult with your accountant to make sure all accounting records for the business are preserved. Your insurance company may want to review such records.
- Once the insurance company pays you for the property losses, do your best to have the property repaired in a timely manner so as to avoid the insurance company claiming that you delayed the repairs causing additional loss of business income.
Your commercial property insurance policy may require other obligations so it is important to read it carefully before and after a loss. Many of the obligations above involve sensitive matters which should be handled with great care. If you are confused or have questions, call The Law Offices of Donald M. Kreke at 305-669-0281.
How The Law Offices of Donald M. Kreke can Help You with Your Extra Expense Claim
Our office helps business owners in all phases of the insurance claim process – from filing initial claims (or supplemental claims) to resolving claims through mediation, appraisal, or litigation. We assist business owners with the following.
- Reporting the loss and establishing claims. After a business sustains a property loss, the insurer that insured the property at the time of the loss should be put on notice of the damage. Reporting the loss in a timely manner makes it more difficult for an insurer to argue that it has been prejudiced by late notice of a claim. When the claim is submitted, a representative from the insurer will usually issue a claim number for all future references to the damage and associated repairs.
- Coordinating and if needed, attending inspections of properties and accounting records. It is very common for insurers to send adjusters or other consultants of various kinds to inspect the loss sustained to the insured property (and the associated accounting records). Cooperating and coordinating these inspections with the insurer helps to prevent the insurer from arguing that it was prejudiced because it was not granted access or timely access to the loss location to inspect the damage and/or accounting records.
- Completing and submitting sworn proofs of loss. At some point after receiving notification of a loss, insurers typically request that the insured provide a “Sworn Proof of Loss.” Generally, this is a one or two page document that requests very general information concerning the loss, including the amount of the loss (although that amount is not always known by the insured because the insured is usually does not have the expertise to how much damage has been sustained and how much such damage would cost to repair).
- Gathering, compiling, and submitting documents to insurers substantiating repairs, business income losses, and incurred extra expenses. Insurance companies commonly request that their insureds provide any and all documents related to the damage sustained, and proof of repairs, business income losses, incurred extra expenses, etc.
- Attending and protecting the interests of insureds during examinations under oath (commonly referred to as an “EUO”) or recorded statements. Insurers often exercise their rights pursuant to insurance policies to take a “sworn statement” and/or recorded statement of the insured(s) (and others) regarding the loss.
- Litigating extra expense claims on behalf of insureds. At times, it is necessary to initiate a lawsuit against a commercial property insurance company. In the event a lawsuit is filed, we will attempt to recovery of attorney’s fees and costs for our clients. See Fla. Stat. §§ 627.428; 626.9373; 631.70; 768.79; 624.155; 59.46; 57.104; and 627.351.
- Working with other professionals assisting insureds during the claims process. Often, it becomes necessary for an insured to employ the services of other professionals to help resolve a claim. Those professionals include public adjusters, experts (including forensic accountants), and consultants. Public adjusters are insurance professionals who are hired by insureds to evaluate the scope of the damage to the property, and to determine the cost to repair or replace the property. In doing so, they often provide a sophisticated estimate (similar to the estimates provided by the adjusters employed by the insurance companies) in support of the insured’s claim(s). For loss of business income claims, it is often necessary to hire forensic accountants to accurately and fairly evaluate the insured’s loss of business income.
- Attending and protecting the interests of insureds during pre-suit mediations.
- Invoking appraisal on behalf of insureds. When appropriate (and there is an appraisal clause in the insurance policy), we assist the insured in requesting an appraisal to determine the amount of the loss, and selecting an appraiser and umpire. At times, we also serve as the insured’s appraiser.
- Assisting insureds settle their property insurance claims. Litigation is not always necessary. When possible, we attempt to secure a fair settlement on behalf of our clients. This often involves a sophisticated process of negotiation with an insurance company and its adjusters and/or attorneys.
- Filing Civil Remedy Notices of Insurer Violations (often referred to as “CRN’S”) on behalf of insureds. When factual and legal support exists to support a potential claim for bad faith insurance practices against the insurance company, we draft and file CRN’S with the Florida Department of Financial Services on behalf of our clients. This is often due to an insurer and its representatives unduly delaying the investigation and payment of a claim, unjustifiably denying a claim, or engaging in some other unfair practice as it relates to the handling of an insured’s claim.
Just because your extra expense claim has been denied does not mean that you cannot further pursue that claim. Our firm often handles claims that have been previously denied.
If your insurance company fails to fully pay your extra expense claim, or fails to adequately or accurately determine the scope of damages for your loss of business income claim, you can file a supplemental or “re-opened” claim. Our office can assist you with the filing and handling of such claims.
Has Your Commercial Property Sustained Damage that is Covered by a Commercial Property Insurance Policy and Your Business Incurred Extra Expenses Associated with the Loss? Has Your Insurance Claim Been Denied, Delayed, or Underpaid?
Call The Law Offices of Donald M. Kreke today for a free consultation regarding your extra expense claim. If you are unable to come to our office, we will come to see you.
Other Legal Matters Handled by The Law Offices of Donald M. Kreke
In addition to extra expense claims, The Law Offices of Donald M. Kreke handles other legal matters including: personal injury matters (including, but not limited to, truck crash claims, automobile accident claims, motorcycle wreck claims, boating collision claims, claims against cruise lines, premises liability claims, slip and fall accident claims, negligent security claims, dog bite claims, and defective products claims), other property insurance claims – both residential and commercial – and inception claims, and supplemental and re-open claims (including, but not limited, broken pipe claims, fire claims, flood claims, hail claims, hurricane claims, mold claims, roof leak claims, sinkhole claims, storm claims, tornado claims, vandalism and theft claims, water claims, wind claims, and loss of business income claims), bad faith insurance claims, criminal defense matters, traffic offenses (including speeding tickets), bad faith insurance claims, property damage claims, collection matters, criminal defense matters, traffic offenses (including speeding tickets), claims against insurance brokers and/or agents, medical malpractice claims, nursing home claims and elderly abuse claims, and matters involving contract disputes. We also assist clients with reviewing and drafting contracts. If your legal issue or matter is not listed above, please contact us. We may be able to help.