How Can I Seek Coverage for COVID-19 Losses?
Although some policies have exclusions that arguably eliminate coverage,
our team at The Ammons Law Firm has found language in many policies that
provides coverage for business losses due to the coronavirus.
At this difficult time for our country, we are offering a free, “no-risk”
review of insurance policies for businesses that have been closed during
the COVID-19 pandemic. Because you may only have 30 to 60 days to make your claim for coronavirus
business closure, it’s important to act as quickly as possible.
All we need is a full copy of your insurance policy, which will be kept
confidential within our firm. If you do not have a full copy of your policy,
we can help you request one for you from your agent or broker.
Here are a few other pieces of information we may need to get started with
your free policy review:
- Complete copy of the insurance policy (or policies) for your business
- Profit, payroll, and other key business metrics
- Date your business closed
- Reason your business closed
- Whether the business was contaminated by COVID-19 infection (or could have
Common Challenges with Business Interruption Insurance Claims
Even if you do have business interruption coverage, it can be challenging
to get the compensation you deserve after suffering losses. One of the
most common challenges is policy language that limits this coverage to
losses caused by “direct physical loss of or damage to property.”
Insurers can be expected to argue that business closures related to the
coronavirus do not meet these requirements.
Elsewhere, courts have held that business losses caused by a threatened
loss—from flood or fire, for example—are not physical losses.
In some states, then, you may not have business interruption coverage
for the coronavirus unless you can prove that your business was actually
contaminated, and you were forced to close as a result. Other courts,
though, have decided that business losses caused by pandemics or even
diseases like E. coli are direct losses and are covered under these policies.
Since the outbreak of SARS in 2003, some insurance policies also explicitly
exclude damages caused by microorganisms. A standard insurance clause
excludes payment “for loss or damage caused by or resulting from
a virus, bacterium, or another microorganism that induces or is capable
of inducing physical distress, illness or disease.” Other policies,
however, only exclude from coverage losses caused by bacteria, but not
viruses like the coronavirus. These nuances in the language make it essential
to speak with an attorney who can carefully review your policy –
and the law that will be used to interpret it.
Do I Have
Civil Authority Coverage?
Your insurance policy may also have “civil authority” coverage—a
special type of coverage for lost business income when your business is
closed by order of a government entity. After September 11th and the resulting closure of U.S. airspace to airline travel, hotels and
restaurants were devastated by a loss of business. Even though these businesses
had civil authority coverage, insurers denied their claims, arguing that
the government orders did not order that
Unfortunately, many courts agreed. However, these same court decisions
make a strong case that civil authority coverage will cover business losses
caused by government-ordered business closures due to the coronavirus
crisis, since the current closures are directed at businesses themselves.