Terri’s business was impacted significantly by the COVID-19 pandemic.

3RD PARTY INTERRUPTION RISK
With the growing reliance on cloud-based software and a globalized economy, businesses rely more and more upon  microcaptive   third parties to conduct their day-to-day operations. In the case of Terri, her business is located in a college town and a large percentage of its patients are students. The business relies on a third-party software in order to track procedures and maintain patient records.

INCIDENT
During the COVID-19 pandemic the college that provided Terri with a majority of her patients cancelled all classes and sent its students back home. Despite being an essential business, Terri suffered months of lost income from the lack of patients drawn to her area by the local college.

RESOLUTION
Terri filed a claim for the business interruption to the direct writer of her 831(b) Plan. The direct writer began its claims adjusting process to first determine coverage. Upon review the direct writer determined that its third-party business interruption policy provided coverage for the loss of attraction incident. Once coverage was determined the direct writer requested additional documentation from Terri in order to understand the extent of loss caused by the incident. After receiving financial statements, bank statements and details of Terri’s participation in the Federal Payroll Protection Program, the direct writer determined Terri’s loss and made a claim payment to her business for the limit of the policy. Following the claim payment Terri was able to retain her employees and begin a substantial marketing effort once the college in her area reopened to students.