As COVID-19 continues to unravel, business leaders are facing unique challenges to their businesses, including government regulations, employee and customer safety, and restrictions and shutdowns. What many business owners are finding out is that business interruption insurance claims are commonly the most challenging and hotly contested types of claims.
Business interruption coverage protects the business during a time where they are forced to shut down during an interruption. When the company suffers a disruption to its operation, it may be entitled to benefits equaling the amount of lost earnings.
The multibillion-dollar question facing both insurers and insureds is whether closures related to the coronavirus pandemic are entitled to coverage under the business interruption policies?
Insurance agencies are saying that viruses and pandemics are specific exclusions in many such policies. But COVID-19 being the basis for a business interruption claim, is still fluid. And with states across the country, including North Carolina, ordering nonessential businesses to close their doors during the crisis, a lot of revenue has been lost.
You are starting to see litigation to force compensation from carriers for COVID-19-related damages. A chef in California filed a lawsuit in the Superior Court against Hartford Fire Insurance Co over financial losses. And a New Orleans seafood restaurant recently asked a Louisiana court to rule in his favor that its insurance policy with Lloyd’s of London covered civil authority-ordered closures.
The good news for businesses is that the U.S. House of Representatives recently sent a memo to several insurance trade groups proposing that the insurance industry accept coronavirus related losses under existing business interruption policies. Different states and federal courts evaluate coverage issues posed by the coronavirus differently. Each policyholder should read and understand their coverage language. The language and how it is portrayed can make or break your case and stop insurance companies from wrongfully denying these claims.
Here at The Law Office of Thomas D. Bumgardner, we are here to fight for you. If you feel like your business insurance policy should cover COVID-19 losses, fill out our contact us form or call 704-887-4981 for an appointment today.