The Coronavirus pandemic has affected businesses in ways no other event has since World War II. The rapid spread of COVID-19, along with government orders limiting the movement and gathering of people, has resulted in the mandatory closures of businesses throughout the United States. Not surprisingly, these orders have resulted in significant income losses for businesses.
For many business owners, these losses were tempered by the fact that they knew they had purchased and paid for business interruption insurance that would help the business survive the closures. Generally, when a business owner pays policy premiums for insurance coverage in exchange for “business interruption” or “all risk” coverage, the insurance company must provide coverage under the terms of the contract unless coverage is clearly and specifically excluded. Business owners have long paid steep premiums for business interruption insurance to provide income in the event of an unforeseen closings. While they hoped it wouldn’t ever be necessary, many owners who have been closed are thankful they acknowledged this contingency and paid for such expensive coverage.
However, despite customers having paid for business interruption and other coverage, including Civil Authority coverage, some insurance companies are now uniformly denying claims submitted by businesses due to the Coronavirus pandemic, citing such things as and lack of property damage. Without this coverage, business owners are left without the benefit of coverage they paid for and facing decisions about how and whether they can remain in business.
The situation became so critical that a group of bipartisan House lawmakers directed insurance trade groups in March that they should recognize the coronavirus outbreak as part of their policy holders’ business interruption coverage. Despite that direction, some insurers are still refusing to pay.
Businesses ordered to close due to Covid-19 are challenging their insurer’s denial of their coronavirus-related insurance claims. The owners are seeking to recover the benefits that they paid for and that the insurance companies promised to provide.
Our legal team is working with business owners who have had their business interruption insurance claims triggered by the Coronavirus pandemic denied by their insurer. If you are a business owner that has been denied coverage for business interruption insurance and want more information on this case, visit our case page for more information.