Business Interruption Insurance Claim Denied due to Covid?
Business owners have insurance for lots of events: theft, fire, injuries, and a thing called “business interruption”. A typical “business interruption” provision provides coverage for the suspension of a business caused by a direct physical loss, damage, or destruction of covered property. Usually, the loss has to be caused by or the result of a covered “cause” of loss.
The Coronavirus Pandemic has caused businesses all over the region to shut down. Restaurants and bars have had to convert to pick-up and delivery only, with many closing because that type of business does not generate enough income to keep the doors open. Retail businesses that aren’t selling essentials are closed to foot traffic and cannot stay open. The effects are being felt at every level of the economy.
How are Insurance Companies Responding?
Since these pandemic-related business interruptions are the result of events outside the control of business owners – just like a fire or a hurricane – the insurance companies that issued business interruption insurance are seeing a tidal wave of new claims.
Faced with devastating losses that they failed to plan for, the insurance companies are taking the position that a region-wide shutdown due to a virus is not a covered “cause” for interruption and are improperly denying these claims. Think about it, insurance companies that collected billions of dollars in premiums are now just telling the suffering business owners who paid them, “no”.
The only choice for businesses with these policies is to file claims, receive a denial, and file a coverage law suit in court. By retaining an experienced attorney, policy holders can structure creative claims that fit within the terms of the insurance policies to help support claims that coverage should be provided.
What kind of claims can you make?
As a policy holder with a denied claim, you can file suit to have the court declare that the coverage applies. In that lawsuit, you can also make other claims. For example, a policy holder can make claims for “bad faith” on the part of the insurance company, failure to pay claims, unfair settlement practices, violation of state law, breach of contract, and failure to act in “good faith,” just to name a few.
There are many possible ways to try and secure coverage. If you haven’t already filed a claim with your insurance carrier, you should file right away. Once your claim is denied, as it seems like they all will, you should call a trusted attorney for help on how to proceed.
If you have suffered a business closure as a result of the Coronavirus Pandemic, you need to speak to an experienced attorney with proven results. Give Dan T. Matrafajlo, Esq., of Beninato and Matrafajlo, Attorneys at Law, LLC a call to discuss your case. All consultations are free.