Insurance Claims and the Coronavirus
Helping Businesses Impacted by Coronavirus-Related Closures and Losses
The U.S. Travel Association expects the coronavirus pandemic to cost the U.S. travel industry up to $809 billion, along with nearly 4.6 million travel-related jobs. The National Restaurant Association also estimates that over the next 3 months, U.S. restaurants will lose $225 billion due to the coronavirus. While social distancing measures and forced business closures may be important to preserve public health, there’s no doubt that these strategies are devastating for businesses both large and small.
If you are a business owner, you may be able to turn to your insurance company for help. For example, your commercial insurance policy many have business interruption coverage that insures you for losses like these. However, business interruption coverage is a complicated area of insurance law, and understanding the language of your particular insurance policy will be the first step in the process. At The Ammons Law Firm LLP, our insurance law attorneys can help you explore your legal options and negotiate on a claim if needed.
Call (281) 801-5617 today or message us online to get started with a free business insurance policy review!
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 LLP has found that rejection of a claim by the insurance company is not the final answer. We recommend your claim be evaluated by legal counsel. 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.
Attorney Patrick Luff, a former law professor who has taught other lawyers about business interruption coverage, is leading our firm’s effort in this area. 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
- Date your business closed
- Reason your business closed
- Whether the business was contaminated by COVID-19 infection (or could have been contaminated)
- Profit, payroll, and other key business metrics
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 those businesses close.
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.
Your Advocates During the Coronavirus Crisis and Beyond
The bottom line is that the U.S. business losses caused by the coronavirus will be staggering, and insurance companies will try every excuse to avoid covering these losses. When business buy business interruption coverage, they expect to be given protection if they are unable to continue normal operations. Businesses deserve advocates who will fight for their rights and ensure that insurance companies hold up their end of the bargain.
If your business has sustained losses caused by the coronavirus pandemic and you have questions about your rights or coverage under an insurance policy, call the lawyers at The Ammons Law Firm LLP for a free, no-risk consultation. We are passionate about helping small and large business owners to pursue fair compensation after suffering losses.
Contact us at (281) 801-5617 today to reach our team.