A GoFundMe raised $30,000 for an insured gym after a fire. (Photo: smile23/Adobe Stock)
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Editor's Note: In our question this week, an insurer is asserting that donations should offset a gym's business income loss.
Question: Our client is a gym that experienced a fire on January 1. Friends and customers started a GoFundMe that raised $30,000 in January. The insured was able to relocate down the street to a temporary space. Relocation and temporary expenses are considered extra expenses but have yet to be paid by the insurer.
The insurance company's accountant wants to use the GoFundMe donations as an offset to the income loss. We said donations are not business income, and the donations went to pay for uninsured losses. (The business was insured for $90,000, and the loss totaled $130,000.)
Is the accountant's logic correct? For example: if we give a neighbor who had a kitchen fire a casserole, should that come off their insurance claim's food loss?
— Pennsylvania Subscriber
Analysis: GoFundMe accounts can generate many donations for a business after a catastrophe, especially a business that is a customer favorite. But should those donations be considered business income when filing a claim?
Answer: To learn the answer to this week's coverage Q&A, please log into your FC&S Expert Coverage Interpretation account.
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