With the current COVID-19 global
crisis still disrupting day-to-day business, and most communities being asked
to stay home to help flatten the curve, the loss to businesses like yours are
uncertainty regarding timelines and the potential start of our collective
recovery still unclear, it’s never been more critical to take the proper steps
to track, document, and otherwise prepare to measure any potential business
interruption losses, including loss of income and extra expenses, related to
As your insurance broker, Fred C.
Church can help you assess the likely insurance coverages, offer essential
guidance, and assist with measuring your potential losses. These measurements
are often quite complex, and with the widespread impact of this event, we want
to be there for you to offer our support.
STEPS TO TAKE
up a separate General Ledger account to capture specific event-related expenses
outside of normal business expenses. (This is a receivable account and does not
flow to P&L).
- Examples include outsourced services for
decontamination/sanitization, security services, etc.
- Do not include hourly labor or utilities (This
will be analyzed separately).
and compile specific canceled and/ or reduced events, orders, bookings,
contracts, etc. (where applicable).
specific mitigation efforts undertaken (i.e., use of an alternate location to
assist, outsource to a competitor, use of finished goods inventory, etc.).
and summarize hourly labor specifically related to event (employee name, dates
worked, hours (Reg or OT), hourly rate ((Reg or OT)), and general description
of task(s). Establish a specific labor work task code related to the event, if
QUESTIONS YOU’LL NEED
the products or services the business provides.
are your main customers?
many days do you operate? What are normal business hours?
in detail how the event affected your business.
long do you expect to be closed or impacted?
there been any significant changes to your business or industry within the past
revenue truly lost – or postponed /delayed?
you own other locations? If so, can they be used to assist?
payroll details (how many employees, what are they doing during the loss period,
effect on labor cost post-event)
RECORDS TO HAVE
P&L statements for the last two years
and description of any other unusual events during the past two-three years
(i.e., hurricane, customer relocation, etc.)
revenue reports (if applicable) for 30-90 days before and during the loss
payroll reports for the 12-months prior to and during the loss period
regular reports used to manage/monitor business activities for one year prior
to and during the loss period (e.g., key performance indicators)
Be sure to visit the Fred C. Church COVID-19 Resource Hub where you can find more information about common commercial insurance coverages and how they may respond to a business loss, unique business risks associated with the pandemic, COVID-19-related employee benefits considerations, and other helpful resources.