Whether your commercial property policy pays for the income you lost when the power went out on July 27 comes down to two things: what caused the outage, and what your specific policy says.
Below is what business-interruption coverage actually pays for, the coverage hurdle that decides most power-outage claims, why the storm behind the July 27 outage matters to your case, the steps that protect your claim now, and your options if the insurer says no.
Does business interruption insurance even cover a power outage like this?
The real question isn’t whether you lost income (you may well have); it’s whether the thing that shut you down is the thing your policy agreed to cover. That distinction is where most of these claims are won or lost.
Why doesn’t my policy pay just because the power went out, and when does it?
Under Illinois law, that policy language decides it. Courts read insurance policies by giving the words their plain, ordinary meaning and interpreting the policy as a whole (Hobbs v. Hartford Ins. Co., 214 Ill. 2d 11 (2005)). If a term is genuinely open to more than one reasonable reading, the ambiguity is resolved in your favor, against the insurer that wrote it. Lawyers call this rule contra proferentem. And when a claim turns on an exclusion, the insurer carries the burden of proving that exclusion applies. If the exclusion has an exception that puts coverage back, the burden shifts to you to prove that exception (Wells v. State Farm Fire & Cas. Ins. Co., 2021 IL App (5th) 190460). That set of rules is exactly how a power-outage dispute plays out.
The July 27 outage was caused by a storm: does that help my claim?
It may, depending on how the cause of your loss is analyzed under your policy. The July 27 event wasn’t a routine grid hiccup; it was severe weather, and that matters for how the cause of your loss gets analyzed.
The National Weather Service confirmed seven tornadoes and straight-line winds of 80 to 105 mph across the Chicago area. That included a 104 mph gust near Monee, among the strongest ever measured in Illinois. That wind and the resulting downed trees and lines are what knocked out power to more than 530,000 ComEd customers. The vast majority of remaining customers were not restored until July 31. For many businesses, that’s several days of closed doors and, for anyone holding refrigerated stock, a freezer full of loss.
Why does the storm cause matter? Illinois follows the efficient proximate cause rule by default. When a loss results from a mix of a covered cause and an excluded one, coverage exists if the covered cause was the dominant one that set everything in motion. The caution is that some policies contain an anti-concurrent causation clause: language designed to override that default rule when a covered and an excluded cause combine. Illinois courts have upheld those clauses (Bozek v. Erie Ins. Grp., 2015 IL App (2d) 150155). So the storm may strengthen your position, but it doesn’t settle it. Your endorsements and exclusions still decide the outcome.
What do I need to do right now to protect my claim?
Give prompt notice, document your losses in detail, and calendar your deadline, in that order. These steps preserve the claim regardless of how the coverage question ultimately shakes out.
- Give written notice to your insurer promptly. Illinois doesn’t automatically forgive late notice. If notice is unreasonably and inexcusably late, coverage can be forfeited even if the insurer wasn’t harmed by the delay (Country Mut. Ins. Co. v. Livorsi Marine, Inc., 222 Ill. 2d 303 (2006)).
- Build your proof now. A business-income claim lives or dies on numbers: profit-and-loss statements, sales records showing what you’d normally earn, the exact days you were closed, spoiled-inventory logs, and receipts for any extra costs. Your policy likely requires a signed, sworn “proof of loss,” often within 60 days. Treat it as a hard condition. (One protection to know: if an insurer denies your claim on some other ground, it generally waives the proof-of-loss requirement. See McMahon v. Coronet Ins. Co., 6 Ill. App. 3d 704 (1972).)
- Find your suit-filing deadline. Commercial policies often shorten the window to sue to one or two years. That clock can start running from the date of loss, not the date of denial. Illinois tolls (pauses) that period from when you file proof of loss until the insurer denies the claim (215 ILCS 5/143.1; Trinity Bible Baptist Church v. Federal Kemper Ins. Co., 219 Ill. App. 3d 156 (1991)). An insurer can also be barred from enforcing that deadline if its own conduct led you to hold off filing suit (Foamcraft, Inc. v. First State Ins. Co., 238 Ill. App. 3d 791 (1992)).
Illinois also holds insurers to a clock. They must respond to your communications within 15 working days and investigate promptly (50 Ill. Admin. Code § 919.40). They must also pay the undisputed part of a claim within 30 days of completing their investigation (§ 919.50).
What if my insurer denies my claim or says the outage isn’t covered?
A denial is not the last word. The insurer has to prove that an exclusion applies. Ambiguous language is read against it. And if the denial was unreasonable, Illinois law gives you leverage beyond the policy money itself.
If the carrier drags its feet or refuses to pay without a real factual basis, Section 155 of the Illinois Insurance Code (215 ILCS 5/155) lets a court award your attorney fees, costs, and a penalty for “vexatious and unreasonable” conduct. The penalty may not exceed any one of the following: 60% of the amount you recover, $60,000, or the amount by which your recovery exceeds the insurer’s pre-suit settlement offer. Courts weigh the total picture: the adequacy of the investigation and whether you were forced to sue (Cramer v. Insurance Exch. Agency, 174 Ill. 2d 513 (1996); McGee v. State Farm Fire & Cas., 315 Ill. App. 3d 673 (2000)). Refusing to pay even the undisputed part of a claim to force you into court has itself been held vexatious (Millers Mut. Ins. Ass’n v. House, 286 Ill. App. 3d 378 (1997)).
An honest caveat: if the insurer had a genuine, reasonable basis for its coverage position, that “bona fide dispute” can defeat a Section 155 penalty even if it later loses on coverage. Merely being wrong isn’t the same as being vexatious.
On damages, the core recovery is the policy money the insurer wrongfully withheld. Beyond that, Illinois allows consequential damages (including additional lost profits) if they were reasonably foreseeable when the policy was written (Mohr v. Dix Mut. County Fire Ins. Co., 143 Ill. App. 3d 989 (1986)). Illinois also allows prejudgment interest at 5% on money due under the policy (815 ILCS 205/2).
What should I do next?
Three moves, right away:
- Pull your commercial policy and review it.
- Lock down your proof (days closed, lost income, spoiled inventory, and extra costs) with real records.
- Give written notice and calendar your suit-filing deadline before anything else runs.
From there, the fight is a policy-language fight, and that’s specific work: reading your endorsements against the July 27 facts, putting the burden on the insurer to prove any exclusion, valuing the income loss correctly, and, where a denial isn’t defensible, pressing a Section 155 claim. Mag Mile Law, LLC in Chicago handles exactly this: business-interruption and loss-of-income disputes and vexatious-denial claims across northern Illinois, in ComEd’s service territory. Partner Steven Mikuzis is both a coverage attorney and a licensed insurance producer, which means he reads these policies the way the carrier that wrote them does, and the firm has litigated business-interruption coverage disputes, including pandemic-era cases. You can reach the firm at 773-644-9593, with offices at 535 N. Michigan Ave. in Chicago, plus Elmhurst and Northbrook.
This article is general legal information about Illinois insurance law, not legal advice, and reading it does not create an attorney-client relationship. Coverage depends on the specific terms of your policy and the facts of your loss; consult a licensed attorney about your situation.