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Business Interruption – Fire at a Nursing Home

Our firm was engaged in a business interruption file for a government funded nursing home facility. The facility also charged residents living in private rooms a small daily rental fee.  The facility suffered a fire and had to relocate residents to other areas of the facility, including common areas and hallways.  As a result, they filed a claim for the loss of government funding and rent.

The facility also filed a claim based on the number of beds in abeyance. The government entity involved indicated that although all residents in the facility were relocated, the rooms that were affected by the fire were considered to be beds in abeyance and would therefore reduce the amount of funding that would be provided in the future.

We were required to review the formula provided by the government to determine how funding was calculated, whether beds in abeyance were deducted from the amount of funding calculated, whether funding was decreased during the period of time in which the facility was impacted by the fire, and if funding could be decreased in the future since funding is subject to annual government review.

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