Can Business Owners Claim for Lost Sales in Denver?

When disaster strikes a business, the impact can ripple far beyond property damage. For many business owners in Denver, the real loss isn’t just structural; it’s the sudden drop in sales when daily operations come to a halt. 

The good news? You may be entitled to file a business interruption claim in Denver to recover those lost sales.

At The Morgan Law Group, our experienced Denver business insurance claim attorneys help business owners across Colorado understand their rights and fight for the compensation they’re entitled to under their business insurance coverage.

In this article, we’ll walk you through what you need to know about claiming lost sales, including what’s covered, how to file a business insurance claim for lost sales, and how to document your financial losses effectively to strengthen your claim.

Colorado Business Insurance Coverage

Running a business in Colorado means being prepared for everything from hailstorms to wildfires to unexpected construction accidents next door. That’s why business insurance coverage is essential, and most comprehensive commercial property policies include business interruption insurance.

This type of insurance helps replace the income your business would have earned had it not been for a covered loss. 

Under standard policies, business interruption coverage generally pays for:

• Net income your business would have earned during the shutdown
• Operating expenses that continue (e.g., rent, payroll, loan payments)
• Extra expenses incurred to minimize loss or resume operations
• Losses due to orders of civil authority that restrict access to your premises

However, policies almost always require a “direct physical loss or damage” to property to trigger business interruption coverage. In other words, just showing lost revenue isn’t enough; there must be a physical event (like fire, water damage, or vandalism) that forced the shutdown or limited operations.

Some policies may also include endorsements for:

• Utility Services – Time Element (covering off-premises power outages)
• Dependent Properties (supplier or customer location disruptions)
• Ingress/Egress (blocked access even without a formal order)

These optional add-ons can significantly broaden your protection. If you’re unsure whether your business insurance coverage includes these options, a business damage claim lawyer in Denver, CO, can review your policy and explain your rights.

What Causes Businesses to Lose Sales in Denver?

Denver is vulnerable to a wide variety of disruptions that can significantly affect business operations. 

Here are some of the most common scenarios where Denver business owners might experience lost income:

1. Natural Disasters

Hailstorms, wildfires, flash floods, and winter freezes can cause extensive property damage, trigger utility outages, or make access to your location impossible. If your business is forced to shut down while repairs are underway, you may have a valid business interruption claim in Denver.

2. Fires and Structural Damage

Accidents happen. Electrical fires, kitchen mishaps, or broken water pipes can quickly cause a shutdown, even if damage is limited to a single area. If your business is unable to operate while repairs are completed, your policy may cover the resulting loss in income.

3. Civil Authority Orders

When a city or state government issues an order that restricts access to your business (such as during nearby construction, road closures, or emergency evacuations, your policy’s civil authority clause may kick in, providing compensation for lost income for a limited period.

4. Power or Utility Failures

Off-site utility disruptions caused by storms or infrastructure failures can cripple your operations. If your policy includes a Utility Services – Time Element endorsement, you may be able to file a business insurance claim for lost sales.

5. Supply Chain Disruptions

If your suppliers suffer physical damage that prevents them from fulfilling your orders or if a key customer location shuts down, this could disrupt your business significantly. Some policies offer Dependent Properties coverage that helps offset this risk.

No matter the cause, if your business experiences a slowdown or shutdown due to a covered event, you may be eligible to file a business interruption claim in Denver and recover your losses.

How Business Owners Can Claim for Lost Sales

Filing a business insurance claim for lost sales can be complicated, especially when insurance companies look for reasons to delay or deny claims. 

To increase your chances of success, it’s essential to understand the process and work with a business insurance claim attorney who can guide you every step of the way.

Step 1: Review Your Policy

Before filing anything, carefully review your policy’s business interruption coverage, including definitions, exclusions, and endorsements. Pay close attention to terms like “period of restoration,” “civil authority,” and “physical loss.” If your policy includes a suit limitation clause (which is common), you may have as little as two years from the date of loss to take legal action.

Step 2: Notify Your Insurer Promptly

Most insurance policies require you to provide timely notice of any loss. Contact your insurer as soon as possible after the event and begin the claim process. Delaying notice can harm your chances of recovery.

Step 3: Prove the Physical Loss

To activate business interruption coverage, you must demonstrate a direct physical loss or damage to property that caused your business interruption. This might include fire damage, structural collapse, or flooding. You may need documentation such as inspection reports, repair estimates, and photographs.

Step 4: Calculate Lost Sales and Ongoing Expenses

Your insurer will require a detailed accounting of your lost income. You’ll need to show what your revenue would have been during the closure (based on historical sales data) and subtract any actual income earned and any avoided expenses.

Step 5: Hire an Attorney if the Claim Is Delayed or Denied

Insurers often undervalue or outright deny valid business insurance claims for lost sales. If you encounter resistance, a business damage claim lawyer in Denver, CO, can help dispute the decision, negotiate on your behalf, and file a lawsuit if needed.

How to Document Lost Sales for a Business Insurance Claim

When you file a business interruption claim in Denver, your success often depends on how well you document the impact of the shutdown. Insurance companies require strong evidence, not assumptions or vague estimates. Here’s how to build a solid foundation for your claim:

1. Provide Financial Records

You’ll need to supply several years’ worth of:

• Profit and loss statements
• Sales tax records
• Monthly revenue reports
• POS data (point-of-sale reports)
• Budgets and sales forecasts

This data will help calculate your projected revenue had the loss not occurred.

2. Track Continuing Operating Expenses

• Even if your business isn’t operating at full capacity, certain expenses continue. These may include:
• Rent or mortgage payments
• Utilities
• Salaries and wages
• Business loan payments
• Insurance premiums

These expenses are often recoverable under your business insurance coverage.

3. Show Mitigation Efforts

Colorado law requires that businesses attempt to mitigate their losses. If you set up a temporary location, shifted to online sales, or reduced staff hours, document everything. Insurers and courts expect to see that you took steps to minimize your losses.

4. Keep Records of the Cause

Photographs, repair invoices, fire department reports, or government orders will support the legitimacy of your claim and prove that your business was affected by a covered event.

5. Use a Forensic Accountant 

For complex or high-value claims, consider hiring a forensic accountant. They can model lost income using industry benchmarks, seasonal trends, and your historical performance, making your case stronger.

Talk to Our Insurance Claim Attorney and Get Back to Business

Losing sales can be devastating, but it doesn’t have to be the end of your business. If your business was impacted by a natural disaster, structural damage, or a forced closure in Denver, you may be able to recover lost revenue through a business interruption claim in Colorado.

At The Morgan Law Group, we’ve helped countless policyholders navigate the claims process and stand up to insurance companies that try to deny or underpay valid claims. Let our dedicated Denver business insurance claim attorneys fight for your rights and recover the compensation your business deserves.

Call our office in Denver today at (303) 493-9340 or contact us using our online form for a free consultation.