14B — January 25 - February 7, 2019 — Owners, Developers & Managers — M id A tlantic
Real Estate Journal
www.marejournal.com
O wners , D evelopers & M anagers
By Kristin Marinelli, KLM Consulting Business income in the world of insurance
I
n finance, we look at busi- ness income as a line item on a profit/loss statement.
from the time of the loss to the resumption of business operations. According to the Insurance Institute for Busi- ness & Home Safety, at least 25 percent of businesses that close due to a disaster do not reopen. What does business inter- ruption coverage cover? Business interruption insur- ance will cover: revenue lost due to the closure rent for tem- porary facilities payroll that enables business to continue to pay employees rather than lay them off utility payments (the difference between your utility costs and increases if higher
than your normal payments) taxes merchandise or inven- tory destroyed mortgage pay- ments advertising expenses to announce your temporary location. Lost income is determined as revenue minus ongoing ex- penses. Pre-loss earnings are the basis for reimbursement under business interruption coverage so the business will need to supply to the insurer a full financial report of both the earnings and the expenses. Business interruption cov- erage is not a separate policy but an added endorsement to a commercial property policy,
business owner's policy, or commercial package policy. Each policy's endorsement is customized to extend the basic policy's coverages. Even after a loss, most poli- cies have a waiting period of several days before business interruption coverage kicks in. The coverage is not retroactive to the day of the loss. Coverage is not open ended. Typically, coverage is available only for as long as it is necessary to get the business running again, usually not longer than 12 months. Businesses must prove all business interruption losses to the insurer.
If a business has a supplier that could be affected by this interruption, the business might want to consider con- tingent business interruption insurance, which reimburses lost profits and extra expenses resulting from an interruption to those customers or suppliers affected. The best way to determine what a business needs is to consult a licensed insurance agent. They will both access the needs and determine how to mitigate risks through an insurance portfolio designed to protect the business and its employees. So, when talking about busi- ness income, remember there is more than one way to think about business income -- think business interruption cover- age. KristinMarinelli is presi- dent of KLM Consulting, LLC. IMC Construction Opens Center City Office PHILADELPHIA, PA — IMC Construction , a nationally-recognized, full- service construction compa- ny, celebrated the holidays at Penn Medicine’s newly con- structed Center for Health- care Technology building with the announcement that IMC has opened an office in Center City. “For the past 40 years we have served this region with great success from our offices in Malvern,” said Rob Cot- tone , president and CEO of IMC Construction. “But our work in Center City has grown exponentially. This LEED Silver, design-build structure for Penn Medicine is a perfect example of a cli- ent that is expanding in the City and in the suburbs. To be responsive, we have to be where our clients are.” The number of Center City projects has steadily increased for IMC, as has the number of IMC employees who live in the City. The new IMC office is located at 121 South Broad Street, across from the Union League and close to public transporta- tion. “We see Philadelphia’s growth continuing through the next decade,” said Cot- tone. “We are investing in the City’s future.”
In insurance, we see it en- tirely differ- en t . Bus i - ness Income = Business Interruption Insurance. W h e n a business suf-
Kristin Marinelli
fers a catastrophic loss due to a fire, flood, theft, or vandalism, business property insurance covers the repair; however, business interruption insur- ance covers the loss of income
Mid Atlantic Real Estate Journal 4x4.25 h_Layout 1 1/17/19 7:43 PM Page 1
TOTAL SUPPORT AFTER A PROPERTY LOSS
M. MILLER & SON L ICENSED PUBL IC INSURANCE ADJUSTERS SINCE 1960
n 24/7 Emergency Services n Policy Analysis n Property Damage Assessment n Full Claim Preparation
n Negotiate Loss and Values n Negotiate Maximum Settlement n Facilitate Prompt Reimbursement n Third-generation, Family-owned
FIRE | SMOKE | WATER | WINDSTORM | COLLAPSE | BUSINESS INTERRUPTION MULTI-FAMILY, COMMERCIAL, HOSPITALITY, INDUSTRIAL, AND RESIDENTIAL PROPERTIES
NEW JERSEY | NEW YORK | PUERTO RICO 1211 Liberty Avenue, Hillside, NJ 07205 Toll Free: 877MMiller (877-664-5537) www.mmillerson.com
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