First, confirm you actually have interruption cover
Start by confirming that the policy really includes business interruption cover, and under which policy it sits. It may be an extension to the property policy or a separate policy, and may be called business interruption, loss of profits or consequential loss. Pull the policy, extensions and endorsements and check four points: which premises and which business activities are covered; the maximum indemnity period; whether it pays lost gross profit, standing charges or both; and whether there is a waiting period during which the first days of closure are not paid.
Most interruption covers require that the same event caused insured damage to your property. If you closed because nearby roads flooded, power failed or authorities sealed off the area while your own property was untouched, payment depends on extensions such as utility failure, denial of access or action by public authorities, which many basic policies do not include.
For typhoons and floods, check whether natural perils are covered and whether flood carries special limits. These terms set the boundary of the claim. Reading them first saves weeks spent proving a loss the policy was never going to pay. If you bought through a broker, ask for a written summary of the cover before you start.
Keep a copy of the full policy wording, not only the schedule. Disputes are decided on the wording, and schedules alone rarely contain the definitions that matter.
If you discover that the company never bought interruption cover, do not try to describe the loss as something else to fit the property policy. Claim what the property policy genuinely covers, record the gap, and fix it at renewal. Misdescribing a loss to fit a policy is the fastest way to have the whole claim rejected and your credibility with the insurer damaged for years.
Notice and cooperation: raise the interruption claim separately
When you report the property damage, state in the same written notice that you are also claiming for business interruption, with detailed figures to follow. Many companies report only stock and equipment and remember the interruption loss after reopening, by which time the insurer may argue notice was late. Give the date of the event, the date trading stopped, the parts of the business affected and the expected recovery time.
Insurers usually send an adjuster to the site. Cooperate with the inspection, provide photos, videos and damage lists, and explain your recovery plan: which equipment needs repair, what stock must be replaced, whether you will move temporarily. Adjusters look closely at whether you resumed trading as quickly as was reasonable, because interruption cover usually requires the insured to take reasonable steps to reduce the loss.
Reasonable costs incurred to reduce the loss, such as renting temporary premises, paying for expedited repairs or hiring replacement equipment, are often covered within limits, but usually only if the insurer is told in advance or promptly. Before spending, send a short email explaining the reason and estimated cost and ask the adjuster to confirm; reimbursement is far smoother that way.
Nominate one person in the company to deal with the adjuster, so that information is consistent and nothing is promised or conceded by someone who does not know the full picture.
Expect the adjuster to ask for documents in several rounds. Keep a running list of every request, the date received and the date you answered, and share it with the adjuster periodically. A shared tracker stops items from falling through the cracks and makes it clear to everyone where the delays actually sit.
Measuring the loss with historical data
The basic approach is what you would have earned in the period had nothing happened, minus what you actually earned, plus standing costs you still had to pay and extra costs to get trading again. What you would have earned is projected from history: monthly turnover and gross profit before the event, the same period last year, seasonal patterns, and orders already signed before the incident.
The usual file includes monthly management accounts and gross profit for the past one or two years; filed tax returns and books to show those accounts are genuine; bank statements and collection records; orders and contracts signed before the event that could not be fulfilled; evidence of standing costs paid during closure such as rent, payroll, loan interest and premiums; and receipts for extra costs incurred to reopen.
Note that insurers check your figures against what you reported for tax. If management accounts and tax returns do not match, expect the adjuster to adopt the lower figure. Clean, consistent bookkeeping shows its value most at this moment. If books or vouchers were themselves destroyed, first follow the steps in reporting destroyed books and invoices, then rebuild the data from bank statements and customer statements.
Present the calculation in a simple table that the adjuster can follow line by line, with a column showing the source document for each figure. A clear presentation often shortens the negotiation more than any argument.
Be realistic about savings as well. If closure meant you stopped paying certain variable costs, such as utilities for a shut production line or commissions on sales that did not happen, the insurer will deduct them. Showing that you have already deducted them yourself makes the remaining figures far more credible and speeds agreement.
How long counts: indemnity period and proving recovery time
The insurer pays for loss within a reasonable recovery period, not simply for however long you stayed closed. If recovery was delayed for reasons unrelated to the event, such as cash constraints or slow decisions, the extra time may not be accepted. Document the recovery: when repairs were requested, when contractors attended, when equipment arrived, when inspections were passed and the day you reopened.
Where you need clearance from authorities to reopen, such as fire, building or sanitary inspections, keep the applications and inspection records. Whether waiting time for government inspection counts depends on the wording and the facts, but a written record always beats an oral explanation. For a failed fire inspection, see failed fire inspection and notice to comply.
If turnover did not return to normal immediately after reopening, some policies take a ramp-up period into account within the indemnity period, usually with a cap. Compile several months of post-reopening figures alongside the pre-event baseline as evidence that the loss continued.
Keep correspondence with landlords, contractors and suppliers about delays. A supplier's email explaining why a machine took longer to arrive is exactly the kind of evidence that persuades an adjuster the delay was outside your control.
It is worth writing a short narrative for the adjuster, one or two pages, explaining in plain language what happened day by day from the incident to full reopening, with references to the supporting documents. Adjusters handle many files at once, and a clear story that connects the documents is much easier for them to accept than a pile of receipts and photos with no explanation of how they fit together. Update the narrative if the recovery takes longer than first expected.
Reduced or denied: common grounds and responses
Common disputes include the absence of insured property damage as a trigger, a cause of closure outside the cover, figures that do not match tax returns, a recovery period the insurer views as too long, and standing costs that included items you could have stopped paying. When you receive a reduced offer or a denial, ask for the reasons and the clauses relied on in writing, then answer point by point.
For disputes over numbers, the strongest reply is a special report from an external accountant prepared on the policy's basis of calculation, tying each item to documents and historical data. For disputes over recovery time, produce the repair, purchasing and inspection timeline with reasons for each wait. For disputes over interpretation, get a written view from your broker or lawyer.
If negotiation fails, you can complain to the insurance regulator or ask it to handle the dispute, or use arbitration or court proceedings if the policy provides for them. Ask a licensed lawyer about the route and any time limits. General guidance on denials is in business insurance claim denied, and for notifying customers when a typhoon or flood stops you performing contracts see force majeure notices.
Throughout, keep every exchange in writing and confirm phone conversations by email, so the record is complete if the matter goes further.
Consider whether an interim payment is possible. Where the loss is clearly covered but the final figure is still being negotiated, many insurers will agree to pay an undisputed portion first, which eases cash flow while the remaining items are resolved.
What to fix at renewal, and how YIXING helps
Whatever this claim exposed should be fixed at renewal. Typical gaps are an indemnity period too short for a realistic recovery, a sum insured set on turnover from years ago, no extensions for utility failure or denial of access, and new branches or warehouses never added to the policy. Recalculate with your broker on the basis of today's business.
Day-to-day preparation matters just as much: keep monthly accounts consistent with tax filings, back up key books and vouchers electronically in a separate location, maintain a list of standing costs, and keep alternative suppliers and repairers lined up for critical equipment. When something happens, these become the backbone of the claim.
YIXING helps Chinese-invested companies in the Philippines structure interruption claims: notices, damage and recovery timelines and summaries of historical trading data, coordinated with external accountants and licensed counsel. We also handle the reports and re-registrations that BIR, the city hall and other authorities may require after an incident.
We can also review your current property and interruption cover with your broker before the next renewal, flag the gaps this incident revealed, and prepare the updated turnover and cost figures the insurer will need to quote correctly.
YIXING Travel Consultancy Inc. (SEC registration CS202009551, Bureau of Immigration accredited agent CA-202624381-1, with DOLE-related accreditation) supports Chinese-invested companies in the Philippines through compliance retainer services: structuring interruption claim notices and files, recovery timelines and trading summaries, accountant and lawyer coordination, and post-incident reports to the authorities. We are not a government office, we do not replace lawyers, accountants or doctors, and we make no promise about any finding, payout or ruling. For your specific case consult a licensed attorney; this article is not legal advice.
Frequently Asked Questions
Is business interruption a separate insurance policy?
Our property was fine but a blackout or road closure shut us. Covered?
How is the loss calculated?
Does the insurer pay for however long we were closed?
What if our accounts and tax returns do not match?
What if the insurer cuts the claim?
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