Businesses that have suffered losses as a result of the COVID-19 outbreak and government-ordered shutdown may be entitled to compensation through a business interruption claim. Unfortunately, many policyholders are getting the run-around from insurers who are refusing to honor policies for business interruption insurance. If you are a business owner and your business has suffered financial loss or closure due to the coronavirus pandemic, your first course of action should be to consult a knowledgeable attorney to determine whether you are covered by business interruption insurance and whether you have grounds to file a lawsuit against your insurer. Recovering compensation could mean the difference between losing your business and keeping it afloat, so don’t wait to call.
Litigation over business interruption insurance stems from the question of whether businesses that were ordered to shut down due to COVID-19 are entitled to compensation for disruptions resulting from a pandemic. The question of whether business interruption insurance policies will cover losses incurred by businesses that were shut down by government orders in the midst of the COVID-19 crisis has a lot to do with the wording of the policies. While business interruption policies cover the cost of closing due to everything from burst pipes to fires and tornado damage, many include specific exclusions for losses resulting from viruses and communicable diseases, like coronavirus.
There have already been a number of business interruption lawsuits stemming from the coronavirus shutdown and many, many more lawsuits are expected to be filed in the coming weeks and months, as the government-ordered shutdown continues. So far, there have been two motions for the Judicial Panel on Multidistrict Litigation to consolidate federal lawsuits accusing insurers of attempting to evade legitimate claims for business interruption losses. And as the litigation heats up, many states are proposing new laws that would require insurers to pay certain business interruption claims related to coronavirus despite virus exclusions in their policies.
• Gather as much information as you can, including a record of your business losses, a copy of your insurance policy and any correspondence with your insurance company.
• Move quickly to avoid missing any deadlines for filing a claim against your insurance company.
• Contact a business interruption insurance attorney to discuss the best course of action for moving forward with your claim.
• Let an attorney represent you. An attorney can attempt to negotiate a fair settlement with your insurance company on your behalf. And if a fair settlement isn’t possible, an attorney will take the insurance company to court for you.
“Insurance companies nationwide have been wrongfully denying businesses their rightful business interruption insurance coverage that they paid for even though the policies do not authorize the denials.”
Business interruption insurance is intended to compensate policyholders for the income that was lost during a period of interruption due to a public health or economic crisis, such as the coronavirus pandemic. As a result of COVID-19, businesses nationwide have suffered crippling economic losses and many business owners are wondering whether they will even be able to reopen their doors once the coronavirus threat has passed. With so much uncertainty surrounding the coronavirus pandemic and subsequent government-ordered shutdown, it is hard to know the extent to which your business and financial well-being could be affected. That is where business interruption insurance comes in. Business owners who pay monthly premiums to their insurers for business interruption insurance do so to safeguard their businesses in the event of a disaster. The current disaster business owners are finding themselves suffering from is the COVID-19 pandemic and resulting shutdown.
Filing a business interruption insurance lawsuit can help cover costs related to:
• Mortgage payments
• Rent or lease payments
• Relocation costs
• Loan payments
• Payroll
• Taxes
• Utility costs
Business interruptions resulting from the novel coronavirus are ongoing and business owners with business interruption insurance coverage who suffer a financial downturn because of the impact of COVID-19 may qualify for economic assistance from their insurance company. Under state and federal law, insurance companies owe a duty of good faith and fair dealing to the people and businesses they insure. And when they fail in this duty by refusing to make good on payments owed to policyholders, the policyholders may have grounds to file a lawsuit for insurance bad faith. This may be the case with insurers who are underpaying or outright denying legitimate business interruption insurance claims stemming from the coronavirus shutdown. Insurance coverage questions are likely to arise in cases where businesses have been ordered to close by the government, as we have seen with the coronavirus pandemic, and due to confusion about the wording of business interruption policies that require “physical loss or damage.” Having an attorney assist you in evaluating your business interruption coverage and claims of business loss can help you obtain the maximum recovery possible.
Litigation Builds Against Insurers Over Coronavirus Business Interruption
States seek to force insurance companies to pay those with business interruption policies
Santa Barbara business owner surprised by denial of COVID-19 Business Interruption claim
