Loss due to business interruption

February 28, 2018

When a natural disaster occurs, having business interruption insurance¹ will help you replace the income that your business would have generated had the disaster not occurred. (The amount to be replaced is based on your business’s financial statements and other documents.)

It also covers operational expenses such as payments for contracted services whose invoices continue to arrive even if the business is temporarily closed.

For business interruption insurance to apply, the business must have suffered physical damage (direct damage) to the facilities covered by the business’s insurance policy

A determination is made of unearned income that indicates what percentage of your business’s income was lost. For this determination, insurers take the following elements into account:

  • Length of interruption (date on which operations resumed)
  • Disclosure of daily sales over the last 3 months
  • Copies of monthly sales and service tax (IVU) reports for the last 3 years
  • Copy of the last audited financial statement
  • Copy of the last income-tax filing
  • Interim financial report
  • Evidence of rent payment for the last 2 months
  • Disclosure of additional expenses incurred, with invoices and evidence

If you include all of these documents with your claim, the process will be faster and efficient. In addition, there is often what is known as a waiting period, which is usually between 48 and 72 hours from the time the business suffers a loss until the insurance takes effect.
If you would like more information about how to obtain the appropriate amount of protection for your business, call Popular Risk Services² at 787-731-6900.


¹Insurance products are not deposits, are not insured by the FDIC or other federal government agencies, are not insured by the bank, and may lose value.

² Popular Risk Services is an Insurance Producer duly authorized by the Insurance Commissioner’s Office to manage life, disability, miscellaneous, title, health services, and variable insurance in Puerto Rico.