COVID-19 & Business Interruption Insurance Claims
The COVID-19 pandemic has significantly disrupted the way of life of most people in this country. Not only has the coronavirus significantly affected the health and well-being of thousands of people, but it has also led to the economy grinding to a halt. Quarantine and stay at home orders have closed all non-essential businesses and significantly disrupted the operations of businesses that were allowed to remain open. Many business owners are turning to their business interruption insurance policies to help them, only to discover that they may have trouble obtaining the coverage they paid for.
What is Business Interruption Insurance?
Like any insurance coverage, business interruption insurance is designed to help businesses cover losses in the event something happens to disrupt regular business operations. However, as opposed to insurance designed to cover repairs and replacement of equipment and buildings, business interruption insurance is available to help put businesses in the same financial position they would have been in had the disruption not occurred. This can include coverage of lost profits, fixed costs that continue while a business is closed, temporary relocation costs, commission and training cost for any new equipment, and more.
Business interruption insurance is not usually part of a businesses’ regular insurance package, but rather an “add-on” that business owners may choose to purchase.
Which Policies May Cover Pandemic Related Losses?
Business interruption insurance is typically available to cover disruptions that happen due to a wide array of disasters. This includes natural disasters such as fires, earthquakes, and floods, as well as incidents such as supply chain failure, cyber-attacks, utility disruptions, and more.
However, it is not likely that many business interruption insurance policies mention pandemics specifically. In these cases, we will turn to what is known as “civil authority ingress/egress” clauses. This relates to government-mandated closures of businesses that directly cause a loss of revenue.
How to File a Business Disruption Insurance Claim
Because we are in an unprecedented situation due to the COVID-19 pandemic, we advise businesses to take additional precautions when filing business interruption insurance claims. What we mean by that is, you should strongly consider securing assistance from an attorney with extensive experience handling business interruption insurance claims.
Typically, these claims would be filed like any insurance claim. But we are not in a typical situation. Insurance carriers are sure to scrutinize every claim that comes across their desk right now in an effort to avoid making large payouts. Filing a business interruption claim in the wake of the coronavirus pandemic means that businesses need to have all paperwork filled out correctly and all required documents available. This includes:
- Historical profit and loss statements
- Tax returns
- Rent rolls
- Proof of how the closure has affected your business
When to Contact a Lawyer
If your business has experienced significant disruption due to the COVID-19 pandemic, you may need to seek legal assistance in order to obtain any business interruption insurance coverage you are entitled to. At Dawson & Rosenthal, our skilled business interruption insurance attorneys are ready to get to work investigating every aspect of your claim to secure all compensation should receive. We understand that this is an incredibly difficult time for you and your business, and we want to ensure that you are treated fairly by your insurance carrier. When you need a COVID-19 business interruption claims attorney, you can contact us by clicking here or by calling (619) 354-1652.