A business owner’s policy or commercial property insurance frequently includes business interruption coverage. This protection is designed to cover the losses of the property owner or business if a fire, natural disaster or other major issue prevents a business to continue operating normally.
With Covid-19 raging across the world, the government is forcing an increasing number of businesses to temporarily close their doors. This represents a significant loss of income. Does business interruption insurance cover these losses?
Whether such losses are covered or not really depends on the interpretation of the words and language of the policy. Before you contact your insurer, consult with a Coronavirus business interruption claims lawyer first.
This is because insurers are adept at denying claims or to respond with a lowball settlement offer. It is in their best interests to pay out as little as possible on all claims. Thanks to the often-confusing words and language in which insurance policies are written, it is all but impossible for people to accurately discern what’s covered and what isn’t.
Additionally, the Coronavirus is a new disease that insurers haven’t encountered before. This makes them even more likely to deny claims related to this virus, perhaps without thoroughly investigating the circumstances.
It is for these reasons and more that people are encouraged to contact a Covid-19 business interruption claims lawyer. You can rely on them to provide a fair interpretation of your policy’s words and language. This increases the chances of getting the compensation you deserve for your business interruption claim.
Business interruption insurance generally cannot be purchased as a stand-alone policy. Instead, it is one component of a broader business owner or commercial property policy.
Typically, business interruption insurance cannot be used for the enterprise in the event of a brief cessation of operations (such as a power outage) or when some portion of it gets halted.
Claims under business interruption insurance can cover things like:
Before business interruption insurance can come into effect, a “covered peril” must occur. Examples of a covered peril may include a fire, flood, hurricane, tornado, or other natural disaster. Of course, it’s critical that you review your insurance policy to determine precisely which perils are covered.
Common language in business interruption insurance policies states that the insurer will pay for the actual business income lost, as long as that loss results from the essential suspension of operations during a restoration period. Usually, the suspension of operations is made necessary by the direct physical destruction, damage, or loss of property.
Unless there is a distinct and demonstrable loss of the physical use of the business property, then it may be difficult, if not impossible, to make a claim under a business interruption insurance policy.
There is no straightforward answer to this question. Many insurance companies already exclude coverage for business closures that result from bacterial or viral illnesses. The early 2000s SARS epidemic is responsible for this exclusion becoming part of most of these policies.
Unlike a fire or tornado, the Coronavirus does not result in visible damage to the property. This may mean that the coverage will not be activated (even though operations are shut down) and the business will have to undergo a lengthy restoration period.
This is because the “damage” caused by the Coronavirus isn’t visually apparent. A business owner cannot point at a drill press, copier, or oven that has been damaged as a result of the virus.
Still, their business cannot operate and they are definitely losing income. It may be possible for Your Insurance Attorney to argue that the Coronavirus nonetheless caused damage. This is if the virus is actually found to be within the confines of the business.
If a place of business can be proven to be contaminated with the Coronavirus, then it may be possible for a lawyer to argue that the property was actually damaged by the virus. Of course, it’s essential that the policy does not exclude damage that results from viruses or bacteria.
Legal precedent may support such an argument. In numerous cases, the courts have decided in favor of the business owners whose property was contaminated by asbestos. The asbestos may not have caused visible damage, but that didn’t mean in the eyes of the law that there was no damage.
Similarly, consider the case of a business where gasoline infiltrated the soil beneath the structure. The building’s foundation and several rooms became contaminated and uninhabitable for a significant period of time. The insurance company’s lawyer said that gasoline soil infiltration didn’t constitute a direct physical loss, but the judge disagreed.
Accordingly, it may be possible for a business that has been forced to shut down because of Covid-19 to make a case for a business interruption insurance claim.
A business owner who contacts their insurer about coverage with regard to Covid-19 closures is likely in for a frustrating experience. Most insurers will issue a flat denial, saying that none of their policies cover loss of income related to a virus.
However, the answer is rarely that straightforward. Entrepreneurs are encouraged to contact Your Insurance Attorney for a full policy review. This may demonstrate that all virus- and bacteria-related losses are not covered under the policy.
Nonetheless, there is a possibility that the business owner may be able to make a successful claim. This may be especially true if the policy carries civil authority coverage. Meeting the claim standards under civil authority coverage can be even more complex and difficult to prove, making the assistance of a qualified lawyer an absolute necessity.
Whether you are in the midst of a claim, have been denied, or have been offered a lowball settlement, you are within your rights to consult with a Covid-19 business interruption insurance claims lawyer. Call Your Insurance Attorney today for reliable advice that you can trust.