Recovering Lost Revenue When Construction Disrupts Your Business

Alex Lowe
By: Alex Lowe
PublishedJun 4, 2024
2 minute read

Construction is undeniably crucial for maintaining and improving our infrastructure. From repairing roads to building affordable housing, the long-term benefits tend to outweigh short-term disruptions. However, if the project is not handled properly, such inconveniences can quickly become a significant economic burden for you and your business.

It’s frustrating to find yourself in the middle of a problem you didn’t create. Fortunately, business owners exposed to financial losses from construction projects gone wrong may have grounds for legal recourse. Let’s go over your options. 

File a Business Interruption Claim 

No matter what the business, getting caught up in someone else’s business is never fun. Depending on the situation, such an incident can force affected businesses to scramble to stay open or close unexpectedly. This sort of disruption can lead to supply chain issues, as well as lost inventory, profits, and wages for employees. 

Filing a claim with your business interruption insurance provider can help you recover financial losses sustained when a construction issue has affected your business’s ability to operate. 

Business interruption insurance can cover lost revenue, daily expenses, and rent or relocation costs in more extreme cases. It’s typically treated like an add-on to your commercial property insurance or business owner’s policy. 

To fast-track your business interruption claim, you will want to have the following financial documents ready to share with your insurance provider: 
  • Federal and state tax returns
  • General ledger
  • Monthly profit and loss statements
  • Inventory list
  • Current and past annual financial statements
  • Invoices
  • Purchase orders
  • Supplier contracts
  • Payroll records
  • Bank statements
  • Loan payments
  • Employee schedule

Even if the full scope of the losses has not yet been fully realized, it’s best to contact your provider as soon as you recognize the construction has had an impact on your operations. 

File a Lawsuit Against the Contractor

While it’s advisable to have business interruption insurance for this very reason, what if you don’t? Or what if your insurance payout is not enough to cover the full value of losses you face due to the construction issue created by the contractor at fault?

If either of these situations occurs, filing a lawsuit against the responsible contractor is another option to recoup your losses.

Colorado law emphasizes that construction businesses should be financially responsible for losses they have caused and should carry liability insurance for this very reason. C.R.S. 13-21-111.5

This way, if the contractor is found at fault, their insurance company is responsible for covering the losses your business has incurred. 

R&H Can Help Your Business Recover Lost Revenue

If your business is caught in the crosshairs of a construction project blunder, you have a right to seek legal remedies. Robinson & Henry’s experienced attorneys can help you protect your business. Call 303-688-0944 to set up an initial consultation.

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