Fighting a Denial of Coronavirus (COVID-19) Business Interruption Claims
The coronavirus has presented challenges to everyone across the country. Many business owners are now facing severe financial strain due to the unprecedented extended closures of non-essential businesses. The economic burden of attempting to pay salaries and operating expenses during a shutdown is untenable for many businesses. In order to find relief, many business owners have filed business interruption insurance claims. Unfortunately, insurance companies are regularly denying claims based on disruptions caused by COVID-19.
The Reiff Law Firm has dedicated over forty years to fighting for the rights of the insured against their insurance providers. In these uncertain times, you need an attorney with considerable knowledge of the insurance industry and the current state of the law during the ongoing coronavirus pandemic. Call the Reiff Law Firm at (215) 246-9000 for a free, confidential consultation to review your options and learn how you can fight for your business interruption claim.
How Business Interruption Coverage Works During COVID-19
A business interruption policy is typically an extension of a business’s general property damage and liability insurance. This coverage is specifically designed to compensate a business suffering from a prolonged shutdown of operations due to physical damage or loss of property. During the time it takes to restore or repair the property, business interruption insurance would cover the loss of income and other expenses traditionally incurred during operation, such as payroll and utility costs.
Certain policies offer additional coverage. For example, contingent interruption insurance will cover a business that was disrupted by the loss of supplies or services. If your business was open during the pandemic but was forced to close because your suppliers were shut down, this extension could provide coverage for your losses.
Additionally, some insurers offer extended business interruption coverage. Usually, business interruption insurance only covers losses incurred during the “restoration period,” or the time it takes to repair the damaged property. However, after sustaining a significant gap in operations, many businesses will not generate the same amount of income as they did before the interruption. This coverage allows for additional compensation between the restoration period and when the business’s income reaches pre-closure levels. It is essential to review the exact terms of your policy to verify the level of coverage your business has.
Business Interruption Claims Arising from Coronavirus Closures
The coronavirus has resulted in a spike in business interruption claims. However, because of the SARS pandemic of 2006, many insurance companies carved our specific exceptions for closures related to diseases, viruses, and global pandemics. The first thing our seasoned attorneys will do is verify whether your policy includes any similar exclusions.
A fundamental requirement in nearly every business interruption claim is damaged or lost property. Your policy should define the exact meaning of “damaged property,” and that definition could prove to be vital in having your claim accepted. While actual physical damage is usually necessary to trigger a business interruption insurance claim, many policies also include losing the use of the property under the definition of “damage.” If you cannot access and use your property due to a mandatory closure, then COVID-19 could be an event that does indeed “damage” your property.
Another exception to the physical damage requirement could be a provision that allows compensation for interruptions due to government action. In this instance, the covered property does not suffer any actual physical damage. However, a business is not permitted access to it under the order of a government agency or civil authority. A strong argument could be made that the “shelter-in-place” or “stay-at-home” orders trigger this kind of provision.
It is crucial to have our experienced attorney in your corner. In the best of times, insurance companies use their resources to attempt to lower or deny insurance claims. Given the legal uncertainty during the COVID-19 pandemic and the volume of claims submitted, insurance companies will deny claims for a variety of reasons. The Reiff Law Firm has handled complicated insurance matters and has committed attorneys and staff that will work with you to file all of the necessary forms and paperwork along with documents to support your claim.
What Should I Do If My Business Interruption Claim For a Coronavirus Closure Was Denied?
If your claim was denied because your policy has an express exclusion related to viral outbreaks, there are options available. First, if there is language in the policy that is contradictory or ambiguous, courts will typically interpret the terms in favor of the policyholder. For instance, an argument could be made that if the policy covered closures caused by government orders, then that clause could cover your case and a clause excluding viral outbreaks would not block your claim.
Insurance litigation is often lengthy and unpredictable. Our business interruption lawyers will negotiate with your insurance company to attempt to reach a satisfactory outcome. If further legal action is necessary, our attorneys have the depth of skill and knowledge to represent your interests in a lawsuit.
Legislative Help for Businesses Interrupted by COVID-19
Both Pennsylvania and New Jersey have sought to find a legislative remedy for businesses facing the economic hardships associated with an extended forced closure from COVID-19. Each state has introduced bills that will require insurance companies to pay business interruption claims that are a direct result of the coronavirus. However, at the time this article was written, neither bill has passed yet. Even with the pending legislation, you should speak with an attorney for help fighting for your business interruption claim.
Call Our Attorney for Fighting Coronavirus (COVID-19) Business Interruption Claims for a Free Consultation
Businesses across the country are facing extraordinary economic hardships. Those so-called “non-essential” companies that could not function with remote employees are suffering extended mandatory closures. Many are relying on their business interruption insurance to compensate them for lost income and provide the necessary funds to keep their business viable. When those claims are denied, many small businesses have no alternatives. Our attorneys are fighting coronavirus (COVID-19) business interruption claim denials for our clients, and we may be able to take your case as well. Call the Reiff Law Firm at (215) 246-9000 for a free, confidential consultation.