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Fire & Water - Cleanup & Restoration

Dentist Abandons Practice After Fire Loss- Will Policy Proceeds be Recovered?

5/7/2018 (Permalink)

Fire Damage Dentist Abandons Practice After Fire Loss- Will Policy Proceeds be Recovered? Fire & Smoke Restoration Technician | Odor Control Technician | Upholstery & Fabric Cleaning Technician | Water Damage Restoration Technician

An Excerpt from Property Casualty 360 Q&A

Question: Our insured had total fire loss and is insured under a business-owners policy. The insured is a dentist and determined that as of this loss she would abandon this practice as she had other locations that were more productive.

Since there was a direct loss from a covered peril, but no period of restoration to speak of, will the insured recover any policy proceeds under business income coverage?

Answer: In order for business income coverage to be triggered, the insured must suffer an actual loss of business income due to the necessary suspension of operations during the period of restoration. If the dentist is not continuing the business at that location, and it is not going to be repaired or replaced, you are correct that there is no period of restoration, and there is also no loss of income due to suspension of operations, so there would be no business income coverage.

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