Were You Denied for a Coronavirus Business Interruption Claim in NJ?
New Jersey businesses are not immune to the devastating economic effects of the coronavirus. Business owners that had to close their businesses to mitigate the spread of the coronavirus are facing serious financial strains. Many have turned to filing claims under their business interruption insurance policies only to be denied coverage. Our coronavirus business interruption claim lawyers at the Reiff Law Firm explain how you can appeal denials for these kinds of claims and what options you might have to get the coverage you need.
Understanding New Jersey Businesses Interruption Claims for COVID-19
When a business owner pays for property damage insurance, coverage for unforeseen interruptions is typically included. Business interruption insurance is designed to provide a company owner compensation for losses caused by a disruption in operations. These losses could include operating expenses, payroll obligations, and the cost of repairing damaged property or relocating.
Business interruption insurance policies will be triggered by a wide variety of occurrences, but they generally require actual property damage and loss. For example, a structural collapse at a factory that destroys essential machinery and closes the business for an extended period would trigger a business interruption claim. However, there are some exceptions that do not require physical damage, such as a shut down under the order of a civil authority. Also, some policies define “damage” as including the inability to use the property for its intended purposes. As a New Jersey business owner, you should be familiar with the terms and provisions of your insurance policy.
When the time comes to filing a claim, you should first thoroughly review your policy. No two policies are the same, and the exact terms will differ from policy to policy. Understanding the specific language of your policy will help you determine the likelihood of a claim’s success.
If there are terms that are defined in the policy, it is vital to understand how those terms relate to your situation. For example, does the term “physical damage” mean actual damage to your property, or does being unable to use the property for its intended purpose fall under the definition as well?
Is Coronavirus Covered Under New Jersey Business Interruption Insurance Policies?
“Covered perils” are the events that could trigger coverage under a business interruption policy. Generally, business interruption insurance policies are categorized into two groups: “open peril” policies and “named peril“ policies. The difference will significantly influence potential denials.
A “named peril” policy will include an extensive list of the covered events. If something occurs, such as COVID-19, that is not explicitly listed, then it might not be covered by the policy. On the other hand, an “open peril” policy will cover just about everything unless the policy specifically excludes that event.
Whether your insurance policy is open or named, it could still have a list of specified exclusions listed. After the SARS pandemic threatened the United States, many insurers began intentionally excluding viral and bacterial outbreaks or diseases from their coverage.
Sometimes these provisions could stand alongside terms that appear contradictory. For instance, you might not know which clause controls the coronavirus closures in a policy that has a virus exclusion but covers closures caused by a government order. The language would present a potential ambiguity for non-essential businesses closed due to a threat of a viral infection.
Finally, it is important to remain informed of any legislative actions being taken to alleviate the financial struggles of New Jersey businesses. New Jersey is one of a handful of states that have introduced legislation to require insurers to cover small businesses that have been disrupted by the coronavirus. At the writing of this article, the legislation has not yet passed. While this bill will greatly help New Jersey small business owners, it is essential to call our knowledgeable attorney if your insurance claim was denied instead of waiting for this pending legislation to pass.
What to Do if Your NJ COVID-19 Business Interruption Insurance Claim was Denied
If your business suffered losses because of a disruption in operation caused by the coronavirus and your COVID-19 business interruption claim was denied, there are some steps you should take. First, it is important to contact our experienced New Jersey lawyers.
Before consulting with the Reiff Law Firm, there are several documents and records you should collect for review.
- A complete copy of your insurance policy, including any riders or addendums
- Copies of your employee payroll records
- All of your financial records and bank statements for the last twelve months
- Any proof of physical loss or damage to property
- Documentation detailing any additional expenses or losses, including ongoing utility bills or costs incurred to maintain the property
- All correspondences with your insurance company, including letters, emails, or notes regarding phone conversations
Often, even when times are not as uncertain as they currently are now, insurance claims are denied. As a business owner, you have other worries and concerns to focus on. You need the services of our attorney, who has years of accumulated knowledge and skill from handling complex insurance cases, with help fighting a coronavirus business interruption claim denial.
Your claim could have been denied for reasons other than the coronavirus. For example, it is possible that when filing your initial claim, you failed to include enough documentation for your carrier to make a determination.
Because of this, you should not accept a denial at face value. It is important to determine whether the denial is consistent with the terms and provisions of your policy. If the policy is ambiguous or if the denial violates your policy, then your insurance company could be found to be acting in bad faith.
If Your NJ Coronavirus Business Interruption Insurance Claim was Denied, Call Our Experienced Attorneys Today
If you have been paying your insurance premiums for years, you should be entitled to benefits for claims during this unprecedented pandemic. The effects of COVID-19 have adversely impacted business owners throughout New Jersey. Our attorneys fight insurance companies on behalf of business owners and work to get them the coverage they deserve. If your business interruption claim was denied because of the coronavirus or for any other reason, call the Reiff Law Firm at (215) 246-9000 to schedule a free, confidential consultation.